Yintech Investment Holdings has registered an F-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). The offering is valued up to $80 million, although no pricing details were listed. The company intends to list its American depositary shares on the Nasdaq under the symbol YIN.
The underwriters for the offering are Jefferies and Ping An of China Securities.
This is the largest online provider of spot commodity trading services in China by customer trading volume in both 2014 and 2015, according to Euromonitor. It currently facilitates the trading by individual customers of silver, gold and other precious metals and commodities on three leading exchanges in China, namely the Shanghai Gold Exchange, the Tianjin Precious Metals Exchange and the Guangdong Precious Metals Exchange. They were the three largest exchanges for online spot commodity trading in China in terms of trading volume in 2015.
Yintech was the largest service provider by customer trading volume on the Tianjin Precious Metals Exchange from 2012 to 2015, and the largest service provider on the Guangdong Precious Metals Exchange in the fourth quarter of 2015. It commenced operations on the Shanghai Gold Exchange in November 2015, and its customer trading volume has been growing rapidly since then.
In the filing, the company detailed:
Online spot commodity trading recently emerged as an alternative investment product in China, with aggregate trading volume growing at a CAGR of 35.4% from 2011 to 2015 and reaching RMB29.0 trillion (US$4.5 trillion) in 2015. We believe such growth is largely attributable to the distinctive features of online spot commodity trading. Its deposit-based leverage trading method offers relatively high volatility trading opportunities which appeal to a group of individual investors.
Revenues increased significantly to RMB 1,245.9 million (US$192.3 million) in 2015, from RMB 1,157.8 million in 2014, and from RMB 629.9 million in 2013. The company recorded net income of RMB 106.8 million, RMB 482.0 million and RMB 403.0 million (US $62.2 million) in 2013, 2014 and 2015, respectively.
The company intends to use the net proceeds from the offering to promote its brand and services and to invest in the information technology infrastructure. The remainder will be used for general corporate purposes, including working capital.
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