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Consumer finance lender Home Credit, popular in China, plans to file US$1 billion IPO in Hong Kong

By Chad Bray chadwick.bray@scmp.com

Home Credit, a consumer finance lender that counts China as its biggest market, plans to file an initial public offering in Hong Kong later this year, in what could be a potential test of investor appetite in the city's markets, according to a securities filing.

The filing on Monday comes two days after brewing giant Anheuser-Busch InBev scrapped plans for an offering of its Asian operations in Hong Kong, citing "prevailing market conditions". The offering, which AB InBev hoped would raise as much as US$9.8 billion, would have been the largest IPO in the world this year.

Home Credit, which is based in Prague, did not disclose the size of the offering in a filing on the Hong Kong Exchanges and Clearing (HKEX) website on Monday.

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Two people familiar with the offering said the company was targeting raising US$1 billion (HK$7.85 billion), which would make it one of the biggest IPOs of the year in Hong Kong.

A Home Credit spokesperson declined to comment.

Established in 1997, Home Credit is focused on consumer lending in nine emerging markets in Europe and Asia, including China, India, the Philippines and Russia.

The company offers point-of-sales loans in shops, often for consumer goods such as televisions. It also offers cash loans and revolving loan products, such as credit cards.

Many of its customers took out the first loan of their lifetime via Home Credit.

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"Advanced data analytics, artificial intelligence and other disruptive technologies are embedded in every step of our customer experience, from application, to approval, to customer management and cross-selling as well as in the collections process," the company said in the filing. "Leveraging our decision-making platform and advanced data analysis technologies, we have reduced the median time to decision to under 30 seconds in the three months ended 31 March 2019 while providing a seamless, simple and mostly paperless application process for our customers."

The company first entered the Chinese market in 2007, according to its website.

The company is 100 per cent owned by Home Credit Group BV, which is a subsidiary of PPF Financial Holdings.

Citigroup, HSBC and Morgan Stanley are acting as joint sponsors on the offering.

The largest IPO so far this year in Hong Kong was the listing of China's oldest brokerage Shenwan Hongyuan, which raised US$1.2 billion, according to data provider Refinitiv.

The decision by Home Credit to seek an IPO in Hong Kong comes at an uncertain time in the city.

The city has seen weeks of protests, including violent clashes with police and the sacking of the Legislative Council building, over a controversial extradition bill that has since been withdrawn. The bill would have made it easier to send people from Hong Kong to mainland China for trial.

The city's economy has also been hit by a year-long trade war between the US and China that has weighed on growth.

Logistics real estate developer ESR Cayman postponed its IPO in Hong Kong last month, citing "current market conditions".

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.