 "We are very excited about entering China through this consortium, and tapping into the potential of this mammoth financial services market. This JV will provide companies with a convenient and efficient solution to invest in productive and logistic equipment by facilitating the process for users financing or purchasing equipment." -- Dato’ Sri Dr. Lim Yong Guan, Executive Chairman and CEO of MoneyMax (NextInsight file photo) |
MoneyMax Financial Services has entered into a joint venture agreement with SGX-listed AP Oil International, 重庆宗申动力 机械股份有限公司 (“Zongshen”) and 重庆保税港区开发管理集团有限公司 (“Free Trade Port Co”) to provide financial leasing services in Chongqing, China.
The consortium is made up of three listed companies and a government-linked company.
MoneyMax, a SGX-listed pawnbroking chain with a presence in Singapore and Malaysia, will make its maiden foray into the Chinese market through a 12.5% equity stake in the JV.
AP Oil International, Zongshen and Free Trade Port Co will take the remaining 12.5%, 70.0% and 5.0% stake in the JV, respectively.
| Stock price | 15.4c |
| 52-week range | 11.5c-18c |
| Market cap | S$54.5m |
| PE ratio | 11.5x |
| Dividend yield | 3.3% |
| YTD return | 4.3% |
| Source: Bloomberg | |
(For AP Oil, the participation seems to be a diversification away from its core businesses of manufacturing and supplying lubricants and specialty chemical products. AP Oil sees it as an extension of its existing business relationship with Zongshen).
The JV, with an initial registered capital of RMB200 million (with about RMB25 million, or S$5.15 million, coming from MoneyMax), will service various fast-growing industries in China.
China is the second largest financial services leasing market in the world but has a relatively low penetration rate of 3.1% of leasing activities, compared to nearly 20.0% in more developed markets.
Healthy development of the industry is expected to be accelerated by efforts by the Chinese government which aims to build a world-class industry with a group of leading enterprises and an effective regulation system by 20204 .
Commenting on the JV, Dato’ Sri Dr. Lim Yong Guan, Executive Chairman and CEO of MoneyMax, said: “This is in line with our Company’s strategy as we remain on the lookout for more overseas opportunities to expand our service offerings and innovative ways to provide financial services.”