With 300m yuan stake in Penging, Vanke goes bullish on fintech sector

Shenzhen-based financial technology platform Penging said China Vanke Co Ltd, the giant residential property developer currently embroiled in a battle for its control, has signed an agreement to invest around 300 million yuan ($45 million), becoming the biggest shareholder in the fintech platform.

The announcement, made on Tuesday, did not clarify how many shares Vanke holds. Zhu Jiusheng, who was previously Vanke’s senior vice-president, will join Penging but his actual post has yet to be announced, according to the fintech platform’s news release.

Vanke conducted detailed, half-year due diligence on the investment and gained a thorough understanding of Penging’s business model, risk control model, staff and other aspects before it made the decision, said the announcement.

Vanke has been paying close attention to the development of the fintech sector and has a positive outlook on the sector. As regulators have been introducing detailed rules and standards for the sector, the fintech market will benefit greatly from improved development and a more competitive environment, according to Vanke.

Penging was established in June 2014 as a joint effort of 22 companies listed in China’s stock market and overseas bourses. The platform’s major business focuses on peer-topeer lending for supply chain finances.

The platform aims to help the “growth of micro and small enterprises”, which has brought 303,100 investors combined yields of 272.1 million yuan through deals of some 9.14 billion yuan so far, according to the platform.

Vanke is one of the several property developers that has tapped the fintech market in recent years, following Dalian Wanda Group, China Evergrand Group, Greenland Group, Country Garden Group and Kaisa Group.

Vanke’s interim report showed that the developer posted a 5.35 billion yuan profit, or 10.4 percent year-on-year growth in the first half year of 2016 amid a recovery in the residential property market, and achieved a sales revenue of 190 billion yuan, an increase of 69.6 percent year-on-year increase.

However, the impact of the battle for control of the property developer with Baoneng Group, its largest shareholder, has cast a shadow over its operations.

Standard & Poor’s confirmed its rating for Vanke at BBB+, with its outlook downgraded from stable to negative amid uncertainty over the developer’s operations.