“Split Ruimin Financial Management?”

Zhang Yida rubbed his hair and cursed with a smile: "Who came up with this? The question is quite accurate.

But he is destined to regret it. The valuation after the split is so low. I don’t know why I would invest in it myself, so why should I look to them?”

After a pause, Zhang Yida continued: "If they don't accept a valuation of US$3 billion, how much can they accept?"

"Ruimin Financial Management was compared with Pai Shou Dai. The volume of loans it has arranged is twice that of others, but its net profit margin is only one-sixth of others.

Paishoudai’s revenue last year was 1.209 billion and its net profit was 502 million; Ruixin Group’s revenue last year was 5.07 billion and its net profit was 355 million.”

Speaking of this, Fang Yuhan felt a flash of regret. It would have been better if all the more than 50 billion funds raised last year had been released from his own assets.

The company's revenue may have exceeded 10 billion, and its net profit was at least 7 to 8 billion.

However, it was not easy for her to comment on what Mr. Zhang had decided.

“So, they don’t recognize Ruimin Financial Management’s valuation of US$2.8 billion, thinking that it is at most the same level as Pai Shou Dai’s valuation.

According to them, the valuation of Paishoudai is currently around US$1 billion to US$1.2 billion.

I think this valuation is on the low side.”

"It must be on the low side!"

Zhang Yida took over and said, "Miao Fenfen's revenue and net profit are slightly higher than Paishoudai, but its valuation is at least US$3 billion.

Don't listen to their nonsense. Paishoudai was valued at US$1 billion in the last round of financing.

It was 2015 at that time, and two years have passed since then, and the valuation has already risen.

Compared with Miaofen, the current real valuation of Paishoudai should be around US$2.5 billion.

Paishoudai and Miaofenqin, as the two leading cash loan companies in China, have extremely high net profit margins, both above 40%.”

Zhang Yida shook his head and sighed, "None of the three companies, Yimin Wangjin, Yimin Dai, and Ruimin Financial Management, have a net profit margin as good as theirs."

"Their interest rate has already trampled on the legal red line of 36%. It is just a side ball and not worthy of praise."

Fang Yuhan smiled again and said: "Our overdue rate and bad debt rate are better controlled than theirs!

In addition, user stickiness is also higher than them. Most of the customers on Ruimin Financial Investment have an investment period of 6-24 months.

The investment period for general P2P platform customers is only 1-3 months!”

"Yes," Zhang Yida agreed, "this is also thanks to the credit endorsement provided by Huimin Bicycle. When people see Huimin Bicycle on the streets, they feel that investing in our platform is more practical.

After all, there is an industrial presence there, which gives people a sense of strength."

“Miaofen, Paishoudai and others have very short loan periods, mostly from 1 to 3 months;

Xinglong Dai is different from Yimin Wangjin in that most of the targets published on the platform are medium and long-term loans of 6-36 months.

From this point we can also see the differences and gaps between us and them.

What can short-term loan customers do with a one or two month loan? They must use the money to eat, drink and have fun.

Most of the users of medium and long-term loans use it for business turnover, house decoration, etc. The uses are quite reasonable.

Most of the customers of their two companies are young people in their twenties and have the awareness to consume in advance, but many of them do not have stable jobs and stable cash flow.

Our customers here are mainly young and middle-aged people in their thirties and forties, people with families and families, who have strong control over their consumption desires, and their bad debt rate is much better controlled than them."

Zhang Yida still agreed with Fang Yuhan's words and thoroughly analyzed the differences between Ruimin Financial Management, Miaofenqin and Paishou Loans.

"Mr. Zhang, I didn't believe in all the predictions you made before. But now that I see the enthusiasm and chaos in domestic consumer finance, I begin to believe it."

Fang Yuhan said very seriously, "If we continue like this, there is a possibility that platforms such as Paishoudai and Miaofenqi will experience a huge explosion of bad debts.

It doesn't matter if they die, but don't spread the risk to the entire industry and harm your peers."

Zhang Yida nodded secretly. It seemed that Fang Yuhan's observation skills were still very meticulous. While everyone was advocating Internet finance, she gradually noticed signs of something wrong.

Unfortunately, a lot of people were killed by their peers, but these two companies relied on their early accumulation to persevere and live a very prosperous life.

“The valuation of Ruixin Group must be at least US$2.7 billion, and we must stick to this bottom line and not let up.

I’ll ask Lan Lan, on behalf of Ruixiang Industrial Investment Fund, to join in the fun!”

After giving the instructions, Zhang Yida called Lan Lan again and asked her to participate in Ruixin Group's Series B financing.

Lan Lan's arrival made several investment institutions suspicious.

What does this mean? Find someone to help you?

Lan Lan noticed the reactions of other investors and explained with a smile: "For the corporate credit reporting and corporate finance markets, Ruixiang has been making plans and has also cooperated with Ruixin Group.

Take Mung Bean Credit as an example. We have been cooperating with Ruixin Group on big data analysis to jointly build a comprehensive credit map covering domestic B-end enterprises and C-end users."

Other investors didn't believe that things were that simple. By coincidence, Lan Lan appeared when the negotiations were deadlocked.

"Mr. Lan, you really know how to rush time!"

Long Yu's words made Lan Lan frown slightly. She hid her emotions well and smiled lightly, "Mr. Long was joking. I also just got the financing news from Ruixin Group.

On the way here, I was a little worried, but don’t worry that the day lilies will get cold. Looking at it now, it’s not too late.”

Long Yu was a little unhappy. Wasn't this a joke about their low efficiency?

But she is not a stupid woman to have climbed to her current position.

There is no need to make enemies for yourself through a little verbal dispute.

She did not continue to provoke Lan Lan, but turned her attention to Fang Yuhan, "Mr. Fang, let's continue the negotiation!"

"good!"

Fang Yuhan briefly recounted what Zhang Yida had told her to the investors present.

“The valuation of Miaofen is US$3 billion and that of Paishoudai is US$2.5 billion.

Except for Ruixin Group's lower net profit margin, its other data are not inferior to them at all.

Net profit margin has been explained before and will not be repeated here.

By sacrificing part of our profits, we gained a stable source of funds and an asset side with zero bad debt rate.

This is much safer than some platforms cutting off information and violent debt collection.

Therefore, the pre-money valuation of US$3 billion is fair and has factual basis and reference.”

Long Yu shook his head, "If Mr. Fang continues to insist on a pre-money valuation of US$3 billion, then we at Bertelsmann Asia can only say sorry and we have to withdraw."

Long Yu's other two allies also spoke out.

Mi Qun said with a serious look, "It's indeed too high. Apart from P2P scale, we can't see any other outstanding achievements of Ruixin Group yet."

"Yes," Zheng Wei nodded in support, "3 billion U.S. dollars is not a small amount. Such a high valuation, but if there is no strong performance to support it, the LP can't explain it.

Taking Ruixin Group’s current annual profit data of US$50 million as a reference, the price-to-earnings ratio is already as high as 60 times.”

"Good projects are scarce resources and naturally have higher prices. Ruixin Group's goal is to become the largest domestic corporate credit platform, the largest domestic corporate financial platform... the largest domestic P2P platform.

If these corporate visions can be realized one by one, shareholders will also reap satisfactory returns."

Lan Lan said with a smile: "What about the financing scale?"

"300 million US dollars!" Fang Yuhan said calmly.

"The investment can be led by Ruixiang Industrial Investment Fund, or it can be an independent investment."

Long Yu and others' expressions were not very good, and they were indeed here to act as trustees.

But giving up on it would not achieve their desired goal.

Yimin Wangjin has a market value of tens of billions of dollars, Yimindai is about to be listed, and Paishoudai and Miaofenqin also have their own listing plans.

All of this information is well known to them.

The sweet fruit of Internet finance is ripe and ready to be picked.

Lan Lan didn't care what their reaction was, Ruixiang was determined to participate in this round of financing anyway.

Corporate credit reporting is a subdivided area of ​​finance, and Ruixiang has never found a niche.

Ruixin Group cannot be let go no matter what.

"Three billion is indeed too high. I think US$2 billion is more reasonable."

Long Yu, who had been extremely strong just now and clamored to quit, suddenly relented and his valuation was increased by hundreds of millions.

Fang Yuhan was very satisfied with Long Yu's reaction. It seemed that Bertelsmann was still reluctant to give up investing in Ruixin Group.

She also slowly started to circle around. Anyway, with the backing of Ruixiang Industrial Fund, she was not afraid of not finding investors.

After several days of negotiations, Bertelsmann and other three-party investment institutions finally compromised and agreed to Ruixin Group's pre-money valuation of US$3 billion.

This valuation is much higher than Zhang Yida’s bottom line of US$2.7 billion.

However, Ruixin Group has a revenue of more than 5 billion and a net profit of more than 300 million. This valuation is not outrageous.

As for the specific financing share allocation, Ruixiang led the investment with US$150 million, and Bertelsmann Asia, Lightspeed China, and Northern Light Venture Capital each invested US$50 million.

The Series B financing totaled US$300 million, and the post-money valuation of Ruixin Group rose to US$3.3 billion.
To be continued...