Nowadays, marriage has become a more and more challenging "wallet" life event, and "installment payment" has gradually become a choice.
FD TECHNOLOGY INC. (hereinafter referred to as FD Technology), the holding company of Shanghai Egg Information Technology Co., LTD., has filed a prospectus with the United States Securities and Exchange Commission (SEC). The company's main business includes providing intermediary services, technical services and marketing services to customers, including "matchmaking" for wedding installment payments.
For the egg technology to the United States listing, the regulatory authorities required it to supplement business norms. Fen Egg Technology was required to supplement whether it invested self-raised funds as a source of loan funds in the process of assisting loans, whether the business belongs to financial or quasi-financial activities, whether it involves personal credit reporting business, and whether it has obtained the necessary business qualification license. Egg Technology was also asked whether its business operations involved post-loan collection services, and whether there were cases of collection in non-compliant ways.
Business includes arranging wedding "instalments"
In August 2023, the company filed a prospectus with the United States Securities and Exchange Commission (SEC), code FDAN, to list on Nasdaq.
According to the prospectus, parting Egg Technology mainly provides intermediary services, technical services and marketing services to customers. These customers are merchants and financial institutions that mainly serve certain key industries, such as the wedding industry, which provides a full range of wedding venues, wedding planning, makeup, wedding photography, flowers, guest hotels and other wedding related services. The portfolio of services involved includes intermediary services provided by the AiShare platform - an interactive online trading platform that facilitates transactions between individual consumers, merchants and financial institutions in key industries.
The "Love Share" platform, launched in July 2016, allows individual consumers to "buy now and pay later" and achieve instalments through partner financial institutions. As of July 31, 2023, the company had approximately 248,800 registered consumers (of which approximately 49% had completed transactions) and more than 3,990 registered merchants, and had established partnerships with 10 financial institutions, including 1 consumer finance company, 1 trust company, 5 commercial factoring companies, and 3 microfinance companies.
Wedding to engage in "stages", which is not often seen, egg technology described in the prospectus is optimistic about this model: consumers, especially between the age of 20 to 40 years old consumers, they are in the forefront of marriage and career development of life stage, often need funds to support their wedding, continuing education and family health related matters.
The installment penetration rate for full-service wedding venues is around 13% in 2022, rising from 8% to 13% in the past five years, and is expected to reach 18% by 2027. When it comes to pre-marital photography, installment penetration remains low, at around 6% in 2022 and is expected to reach 8% by 2027.
Another segment is continuing education. In 2016, about 45.0% of consumers purchased diploma-oriented continuing education products from merchants through instalments. This rate increases to 65.0 percent in 2022 and is expected to reach 72.0 percent in 2027. Such installment providers typically offer credit lines ranging from 50,000 yuan (about $7,249) to 200,000 yuan (about $28,997), with a focus on emerging service scenarios including continuing education.
From the performance point of view, in 2021 and 2022, the income of egg technology was 955.84 million and 10.6895 million US dollars, respectively, and the corresponding net profit was 3,768,700 and 5,040,800 US dollars, respectively.
Asked if the business is financial or quasi-financial
Fen Egg Technology's related loan assistance business has also received regulatory attention.
According to the requirements for the disclosure of supplementary materials for the record of overseas issuance and listing (September 15, 2023 to September 21, 2023), Egg Technology is required by the regulatory side to supplement the five major matters, of which the first major issue is the issue of business norms.
Fen Egg Technology was required to supplement whether it invested self-raised funds as a source of loan funds in the process of assisting loans, whether the business belongs to financial or quasi-financial activities, whether it involves personal credit reporting business, and whether it has obtained the necessary business qualification license. Egg Technology was also asked whether its business operations involved post-loan collection services, and whether there were cases of collection in non-compliant ways. In addition, whether the loan assistance business and the loan collection business during the reporting period are subject to regulatory measures or penalties by the competent authorities.
Egg Technology was also required to explain the scale of the network operation platform "love Share" collection and storage of user information, data collection and use and the name of the platform operator, the reasons for the large difference between the data disclosed in the filing materials and the data on the official website of "Love Share", whether there is any situation of providing information to third parties, and the arrangements or measures for personal information protection and data security before and after the listing.
The Daily Economic News reporter noted that Egg technology had been complained to the Black Cat complaint platform by users because of problems such as credit reporting. According to a message on the Black Cat complaint platform in October last year, some netizens reflected that after the completion of the overdue repayment negotiation for special reasons, it was still reported to the credit investigation. In July last year, some netizens also reflected that they asked Egg Technology to revoke the credit investigation problem.
Regarding data issues, the company mentions in the prospectus that the company generates, collects, stores and processes a large amount of personal, transactional, statistical and behavioral data, including certain personal and other sensitive data from platform participants, including individual consumers, merchants and financial institutions. Although measures have been taken to protect such data, security measures can be breached. As of the release date of the prospectus, there have not been any material violations of the Company's cybersecurity systems or practices.
On October 7, Wang Jiyue, a senior investment banker, told reporters on wechat that the information reflected by netizens on the complaint platform depends on the importance of such information in the disclosure of information in the prospectus.