Exclusive: Ant Group Likely to Sell Stake in China’s First Personal Credit Reporting Firm to Tencent

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Baihang Credit has been suffering from technical problems and gets less support from shareholders than its rivals. Photo: Baihang Credit

Fintech giant Ant Group Co. Ltd. is likely to sell its stake in China’s first personal credit reporting company to Tencent Holdings Ltd., sources with knowledge of the matter told Caixin.

As part of its equity restructuring, Baihang Credit Co. Ltd. is also expected to bring in a local state-owned enterprise as its largest shareholder, they said.

Baihang has been suffering from technical problems and gets less support from shareholders than its rival, Pudao Credit Co. Ltd., the sources said. Both issues are partly due to its current ownership structure, with many entities holding relatively small stakes, they said.

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Explore the story in 30 seconds

Ant Group may sell its stake in Baihang Credit to Tencent, raising Tencent's stake to 16%.
Baihang is restructuring, likely making Shenzhen Investment Holdings its largest shareholder with 35%.
Baihang's technical and funding issues are due to a fractured ownership structure, unlike its better-supported rival, Pudao Credit.

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Who’s Who

Ant Group Co. Ltd.: Ant Group Co. Ltd. is a fintech giant likely to sell its 8% stake in China's first personal credit reporting company, Baihang Credit Co. Ltd., to Tencent Holdings Ltd. This move is part of an equity restructuring effort for Baihang Credit, which has been plagued by technical issues and insufficient shareholder support. Ant Group-backed Qiantang Credit has also applied for a personal credit reporting license, potentially becoming China's third such company.

Tencent Holdings Ltd.: Tencent Holdings Ltd. is likely to acquire an additional 8% stake in Baihang Credit Co. Ltd. from Ant Group, potentially increasing its total stake to 16%. Tencent may further boost its holdings through Baihang's potential extra share issuance. This move is part of Baihang's equity restructuring aimed at addressing its technical issues and insufficient shareholder support.

Baihang Credit Co. Ltd.: Baihang Credit Co. Ltd., established in 2018, is China’s first personal credit reporting company. It is currently undergoing equity restructuring due to technical issues and insufficient shareholder support. The National Internet Finance Association of China owns 36% of Baihang, while eight other stakeholders hold 8% each. Baihang will bring in state-owned Shenzhen Investment Holdings as its largest shareholder with a 35% stake, and Ant Group may transfer its 8% stake to Tencent, boosting Tencent’s stake to 16%.

Pudao Credit Co. Ltd.: Pudao Credit Co. Ltd., founded in 2020, is one of China's two operating personal credit reporting companies. Its largest shareholders are state-owned Beijing Financial Holdings Group Ltd. with a 35% stake and JD.com Inc.’s fintech arm, Jingdong Technology Holding Co. Ltd., with a 25% stake. Pudao has quickly accumulated information on over 590 million individuals, closing in on Baihang's 690 million.

Jingdong Technology Holding Co. Ltd.: Jingdong Technology Holding Co. Ltd. is the fintech arm of JD.com Inc. It is a significant stakeholder in Pudao Credit Co. Ltd., holding a 25% equity stake. Pudao's ownership structure serves as a model for Baihang Credit Co. Ltd.'s planned restructuring. Jingdong Technology's involvement is part of a broader trend of fintech players investing in personal credit reporting companies in China.

Qiantaing Credit: Qiantang Credit, backed by Ant Group, has applied for a personal credit reporting license and may become China’s third such company. Its equity structure is expected to resemble that of Pudao Credit Co. Ltd., with significant stakes held by prominent shareholders.

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What Happened When

Before Baihang's inception in 2018：: Financial institutions mainly relied on the central bank’s credit reporting system to check the creditworthiness of individual borrowers.