JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Investment Advisors

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Investment Advisors, JL Warren Capital

Junheng Li

Equity Capital Markets

FinVolution Group / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/26006" target="_blank" data-smartkarma-citation="entities:26006:1">PPDAI Group Inc (PPDF US)</a> was the first online consumer loan marketplace and according to <a href="http://wdzj.com/" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=http://wdzj.com&amp;source=gmail&amp;ust=1509826159604000&amp;usg=AFQjCNGB26ExuvITgMfUb5VGSC_c6SiT-g">wdzj.com</a> (the leading industry media) PPDai was ranked #4 largest P2P lending platform in China by loan origination value as of Oct 2017.  Its borrower base is young consumers between the ages of 20-40.  Lenders are almost all retail investors (90.6%, to be precise), receiving on average ~14% annualized return, ~9% higher than the yield on the WMPs (wealth management products) offered by Chinese commercial banks.  PPDai is an intermediary between borrowers and lenders.  It does not have a balance sheet therefore in theory it does not nor is capable of underwriting loans that it originates and services for a fee of ~6%[1] of value of the loans.PPDai is one of the Chinese P2P lending platforms that are to be listed in the US in Q4. The IPO share price is expected to be between $16-$19. The market capitalization is therefore in the range of USD 4.9-5.8 billion. In H1 2017, the company reported a net loss of $60 million on $255 million revenue.  Credit Suisse, Citigroup, and Keefe, Bruyette &amp; Woods are the IPO underwriters. Shares are expected to trade on Nov 10th, 2017.In this note, we analyze the mechanism of the P2P lending business model, mainly focusing on its structural challenges and risks.  We also look into some unique features of P2P lending players in China.  The industry has experienced explosive growth in China since 2010, with (legit) number of players reaching 3,437 in 2015 according to Wangdaizhijia, the most authoritative industry media in China.  Since the blow-up of Ezubao – a Ponzi schemed P2P platform robbing USD 7 billion completely away from investors – in 2015, the authorities in China started to crack down on the reckless practices rampant in the industry.  1,400 out of 3,400 platforms that existed in 2015 are now not in operation. During the past 2-3 years, the growth of transaction volume and operating profit for the whole industry have moderated, as the market consolidates.  Yet there are still over 2,000 P2P lending platforms in China today, competing for both borrowers and lenders.  Policy makers are said to be closely monitoring industry movements and new regulation is like a time bomb.

PPDAI Group Inc (PPDF US) was the first online consumer loan marketplace and according to wdzj.com (the leading industry media) PPDai was ranked #4 largest P2P lending platform in China by loan origination value as of Oct 2017.  Its borrower base is young consumers between the ages of 20-40.  Lenders are almost all retail investors (90.6%, to be precise), receiving on average ~14% annualized return, ~9% higher than the yield on the WMPs (wealth management products) offered by Chinese commercial banks.  PPDai is an intermediary between borrowers and lenders.  It does not have a balance sheet therefore in theory it does not nor is capable of underwriting loans that it originates and services for a fee of ~6%[1] of value of the loans.PPDai is one of the Chinese P2P lending platforms that are to be listed in the US in Q4. The IPO share price is expected to be between $16-$19. The market capitalization is therefore in the range of USD 4.9-5.8 billion. In H1 2017, the company reported a net loss of $60 million on $255 million revenue.  Credit Suisse, Citigroup, and Keefe, Bruyette &amp; Woods are the IPO underwriters. Shares are expected to trade on Nov 10th, 2017.In this note, we analyze the mechanism of the P2P lending business model, mainly focusing on its structural challenges and risks.  We also look into some unique features of P2P lending players in China.  The industry has experienced explosive growth in China since 2010, with (legit) number of players reaching 3,437 in 2015 according to Wangdaizhijia, the most authoritative industry media in China.  Since the blow-up of Ezubao – a Ponzi schemed P2P platform robbing USD 7 billion completely away from investors – in 2015, the authorities in China started to crack down on the reckless practices rampant in the industry.  1,400 out of 3,400 platforms that existed in 2015 are now not in operation. During the past 2-3 years, the growth of transaction volume and operating profit for the whole industry have moderated, as the market consolidates.  Yet there are still over 2,000 P2P lending platforms in China today, competing for both borrowers and lenders.  Policy makers are said to be closely monitoring industry movements and new regulation is like a time bomb.

IPO報道 - PPDAI Group Inc (NYSE: PPDF) - P2Pレンディングの弱点