August 30, 2020 - Sheng Ye Capital Limited (the “Group” or “SY Capital”, stock code 6069.HK) is a leading data-driven supply chain financial services provider in China and is the first commercial factoring company listed on the main board of the Hong Kong Stock Exchange. SY Capital has announced a new strategic funding collaboration with internationally renowned credit investment management firm, Dignari Capital Partners (“Dignari Capital”). Dignari Capital will provide US$50 million credit funding to support SY Capital’s supply chain financing business, which is based on high quality account receivable (“AR”) assets. 10% of the total investment amount will be in the form of convertible bond.
Dignari Capital has a strong LP background, including sovereign wealth funds and major international asset management firms. With a focus on discovering and creating quality credit investment opportunities in Asia since 2003, Dignari Capital has over US$1 billion in asset under management.
In the first half of 2020, leveraging on its strong technology capabilities, SY Capital was able to achieve growth against the backdrop of the Covid-19 pandemic and offered efficient online financing services to its small, medium and micro enterprise (“SME”) customers in China. Net profit increased by 46% year-on-year. In addition, income from information technology services grew substantially, with a 12-fold increase year-on-year. SY Capital’s solid fintech capabilities have been well recognized by a number of international institutions. In particular, both DBS Bank and Bank of China International recognize, in their recent research reports, SY Capital’s digitalized risk control capabilities and the promising market prospects. Currently, SY Capital’s long-term institutional investors include China Taiping, Pavilion Capital, a subsidiary of Temasek and Olympus Capital.
Through establishing strategic collaborations with large blue-chip core enterprises in the infrastructure, energy and medical sectors, which are more resilient to economic cycles, SY Capital provides AR-based supply chain financing services to their high-quality upstream suppliers. Grace Tan, Founding Partner of Dignari Capital said, “We are very optimistic about the supply chain financing industry and see substantial financing needs in China’s underserved SME sector. The market has significant room for expansion. As a leading fintech company in the factoring industry, SY Capital is able to provide flexible and efficient financial services to upstream SME suppliers and at the same time maintain a good risk control record with a zero non-performing loan ratio. Factoring assets, based on large blue-chip core enterprises’ payables, are high-quality credit assets. We look forward to further cooperating with SY Capital in the future and exploring this huge potential in the supply chain financing market together.”
In recent years, supply chain financing services have been an efficient solution to meet the financing needs of SMEs, and have received great attention and support from the Chinese government. Driven by strong market demand, third-party commercial factoring continues to show rapid growth. According to statistics from Frost & Sullivan, third-party commercial factoring volumes grew at nearly 100% CAGR for the past five years. In the digital economy, SY Capital continues to strengthen its digitalized risk management and operations while seizing supply chain financing opportunities to improve its service efficiency and quality in return. This enables SY Capital to create differentiated, customized and diversified financing products and services to better support the development of the real economy and continue to consolidate its advantages.
Statistical data source：Frost & Sullivan
This cooperation is a testament to Dignari Capital’s recognition of SY Capital’s premium asset quality and data-driven risk control capabilities, as well as its platform-driven strategy and future development potential. The collaboration also represents an innovation to SY Capital’s funding model, which will help further develop the Group's platform with access to more diversified funding channels such as credit funds. As a strategic credit investor, Dignari Capital will also support SY Capital in risk control technology and corporate governance to build a better future together.
Mr. Tung Chi Fung, Chairman of the Group, said: “We are pleased to cooperate with Dignari Capital Partners, a leading international investment institution, to promote the next stage of our growth through innovative funding models. Going forward, we will consider launching a supply chain financing credit fund asset management platform to further optimize our asset-light strategy and expand our asset scale and market share more rapidly."
Looking ahead, SY Capital will stay committed to pursuing innovation, developing more diversified and efficient cooperation models, and driving sustainable development of SMEs.
