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Chinese Credit Card Repayment Company Samoyed Cancels US IPO Due to ‘Unfavourable Market Conditions’

The raging trade war between the United States and China is something that is almost always going to be on the background of any business deals that might be taking place, which involves entities in either nation. In a new development, Chinese Fintech company Samoyed Holdings Limited has decided to withdraw its initial public offering that was going to take place in the United States. Although nothing in the statement released by the company suggests that the pullout was due to the trade war, it stated that it had decided to withdraw due to ‘unfavorable market conditions.’

The United States has been a highly popular destination for IPOs for companies in China and over the years, plenty of tech companies have managed to raise considerable amounts of capital. In its statement, Samoyed stated, “The company has determined not to pursue the sale of the securities covered by the Registration Statement at this time due to unfavorable market conditions.” The company’s product is engaged in the credit card prepayment space and has been in operation since 2015. During this period, it has managed to grow considerably and perhaps the time was right for the company to go for an IPO in the United States.

It was in 2018 that Samoyed had decided to file for its IPO and aimed to raise a total of $80 million from the market. It had engaged the services of both Morgan Stanley and Deutsche Bank for its purposes. The company’s prospects are thought to be promising because credit cards are still not as prevalent in China yet and hence, there is the possibility of hyper-growth in the years to come. If Samoyed can further fine-tune its product and make it better, then there is no reason why its innovative products would not find the market among millennials in China. In its IPO prospectus, the company said as much and went on to say that the younger population in the country remains its biggest target currently. “Unlike in the U.S., credit card penetration in China is still comparatively low, making credit-proven millennials who already have established a credit history with banks a cohort with prime credit quality and low delinquency rates.” Although the cancellation of the IPO will come as a disappointment for some of its early investors, the company has not categorically ruled out a US IPO in the future.

 

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Jodie Miller

Jodie Miller is experienced journalist. She holds double degree in journalism and communication. She joined our team as a content curator. She enjoys writing and curating contents related to finance and forex world.

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