Betting on China’s financial sector can be risky, especially with the government in the midst of shaking up its sleepy big banks. But one Asian private equity firm has found a way into one rapidly growing sub sector of China banking –the business of credit cards.
RRJ Capital, a Hong Kong- and Singapore-based firm, is investing around $50 million for a “significant minority” stake in one of China’s largest credit card manufacturers, Jing King Technology Holdings Ltd., according to a person familiar with the situation. Jing King Chairman and Chief Executive Lennon Tan will continue to hold a controlling stake in Jing King.
Agence France-Presse/Getty Images
China has issued a total of 4.2 billion bank cards as of the end of last year, according to the country’s central bank. Financial institutions here are expected to issue some 2.5 billion more smart cards over the next three to five years, according to the person familiar to the situation.
Jing King, based in Shenzhen, was founded in 1984 and makes plastic cards, including debit cards, credit cards and SIM cards that go into cellphones. It makes the cards that have a chip-based integrated circuits embedded inside, known as smart cards. Jing King was owned by Southeast Asian private equity firm Southern Capital Group before being bought out by management in 2012.
Domestic credit card manufacturers are private or state-backed firms so determining which players rank largest is difficult. The exception is Goldpac Group Ltd., which listed publicly on the Hong Kong stock exchange last December. Goldpac, backed by Bank of China International, sells machines that cut plastic cards and also makes the cards themselves. Its shares are up 7.5% since listing, compared to a 6.6% loss on the Hang Seng Index in the same period.
Jing King’s growth is promising because it is one of the few domestic smart card manufacturers in China that has accreditations from Visa, Mastercard, American Express, Japan Credit Bureau and China UnionPay to manufacture financial smart cards under each of these payment processing systems. It manufactures cards for most of the big Chinese banks, as well as for telecommunications operations in Europe, South America, Africa and Asia.
Credit card usage is expected to continue expanding, as the government rolls out market-oriented reforms in the country’s financial sector and banks are forced to improve service to their customers. Currently, some Chinese can’t get credit cards from their banks because they can’t provide verifiable income. Banks also find it tough to generate profits from using credit cards because they lack the skills to target customers with the most attractive profiles for such cards.
RRJ Capital Backs Chinese Credit Card Maker
Không có nhận xét nào:
Đăng nhận xét