Events:

On April 12, the people's Bank of China, Banco Insurance Regulatory Commission, Securities Regulatory Commission, safe and other financial management departments once again jointly interviewed Ant Group and clarified the rectification plan of Ant Group. The contents involving consumer finance include: disconnecting Alipay from other financial products such as "spending" and "borrowing"; operating personal credit information business under license in accordance with the law; Ant Group as a whole as a financial holding company; and controlling high leverage and risk contagion.

Comments:

The background of the policy is that some current lending institutions have high leverage risk and excessive collection of user information.

In the current consumer financial business, some lending institutions provide financial institutions with services such as diversion, risk control screening, joint lending and other services. there are some problems such as excessive collection of personal information in the screening of risk control, and there is a high leverage risk in joint loans. affecting the stability of the financial system. We judge that the above two points are the important reasons for the interview with the Ant Group.

Under the double restrictions of flow and capital, the scale of consumer finance may decline.

The interview requires that Alipay be disconnected from other financial products such as "spending" and "borrowing", and the flow of "spending" and "borrowing" will be greatly reduced. In a public statement issued after the interview, the ants clearly proposed that all "borrowing" and "borrowing" should be included in consumer financial companies, and their sources of funds are strictly restricted.

It is expected that the direction of rectification and reform of Ant Group is the development direction of consumer finance in the future. Under the double restrictions of flow and capital, the scale of consumer finance may decline.

The licensed operation of lending institutions has become a future trend, and traditional financial institutions and licensed credit institutions have benefited.

Ant Group applies for individual credit information companies and brings "borrowing" and "spending" into consumer finance companies and other rectification measures, reflecting the regulatory orientation, that is, consumer finance needs to be licensed in all aspects from credit investigation to lending, and is subject to the supervision of financial management departments.

It is expected that lenders will need to operate with a license in the future, and there are two possible directions of transformation:Obtain personal credit license, rely on data advantage to engage in credit services; obtain consumer finance, banking and other financial licenses, engage in credit business.

No matter which direction of transformation, licensed operation is the future trend, and traditional financial institutions and credit institutions that already hold licenses will benefit.

Investment advice: the licensed operation of lending institutions has become a future development trend, benefiting traditional financial institutions and licensed individual credit institutions that already hold licenses.

Risk hint: regulatory policy is further tightened.