China has been at the forefront of FinTech adoption for years, with the nation’s market expected to grow at a CAGR of 19.2 percent by 2024.
“China is known as a safe zone for start-ups to test new applications and ideas. Its financial technology is ahead of the rest of the world and the country possesses all the right attributes, including mostly laissez-faire government policies, a large (and underserved) online and digitally savvy population and an underdeveloped banking sector,” says Michael Moon, managing director, payments, trade and communications for Asia-Pacific at SWIFT.
China accounts for four of the world’s top 10 FinTechs, with local startups attracting the attention of investors around the world. A report from KPMG revealed there was $960 million of investment in Chinese FinTech companies made in the second half of 2019.
One Chinese FinTech experiencing large growth is Fortune Trend. Founded by Huang Shan, the Shenzhen-based firm offers securities trading systems and maintenance services, which contributed to over 84 percent of its earnings for three years in a row. As of the end of last year, the company had assets under management of 1.07 billion yuan ($152 million).
Through its brand Tongdaxin, Fortune Trend has developed long-term partnerships with state-backed companies including CITIC Securities, China Merchants Securities, Guotai Junan Securities, HK-listed China Securities, GF Securities, and Guosen Securities, just to name a few.
Fortune Trend recently announced that its initial public offering has been oversubscribed as it seeks to raise an aggregate of 1.79 billion yuan ($253 million) on the Shanghai Stock Exchange. The proceeds from the IPO will be used to improve its AI-based program, visualized financial research systems, trading platforms, and its big data-driven security monitoring interface.
Notably, data shows that most Chinese companies are choosing to go public in their home country rather than in the U.S. A recent survey of over 1,200 executives found that 66 percent of Chinese business leaders see their home market as the most attractive destination for listing, while only 18.7 percent put the U.S. as first choice.
“Most executives looking forward are veering away from the United States,” said Drew Bernstein, co-managing partner of MarcumBP, which audited the report.