Good News on Listing | Frost & Sullivan Assists B&R CloudTech Co., Ltd. to Successfully List on the Hong Kong Stock Exchange (6608.HK)

Bairong CloudTech Co., Ltd. (hereinafter referred to as 'Bairong CloudTech') successfully listed on March 31, 2021, with a global issuance of 124 million shares at an issue price ranging from HK$26.5 to 31.8 per share, raising up to a maximum of RMB 3.94 billion. Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for Bairong CloudTech's listing and hereby warmly congratulate it on its successful listing.

During the process of listing in Hong Kong, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the company's competitive advantages, assisting the company, investment banks, and other intermediaries in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the company in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

Driven by robust macroeconomic growth and favorable policies, consumer demand in China has continued to grow. Personal credit in China has rapidly increased over the past few years. The balance of personal credit rose from RMB 24.4 trillion in 2014 to RMB 59.4 trillion in 2019, with a compound annual growth rate of 19.5%. Driven by continuous consumer demand growth, it is expected that the balance of personal credit will reach approximately RMB 110.6 trillion by 2024, with a compound annual growth rate of 13.2% from 2019 to 2024. Affected by the COVID-19 pandemic, personal credit growth slowed down in the first half of 2020 and reached RMB 61.2 trillion in mid-2020, a 3.0% increase from the end of 2019. However, due to the gradual recovery of domestic consumption in the second half of 2020 and 2021, it is expected that the balance of personal credit will reach RMB 76.7 trillion by 2021, a 16.7% increase from 2020.

In terms of consumer credit business, credit cards issued by banks and consumer finance institutions with licenses are currently the main products in the market. Driven by growing consumer credit demand, the balance of consumer loans increased significantly between 2014 and 2019, achieving a compound annual growth rate of 24.5%. It is expected to grow at a compound annual growth rate of 16.4% between 2019 and 2024. Driven by demand growth and technological applications, China's online personal credit market increased from RMB 1.4 trillion in 2014 to RMB 6.3 trillion in 2019 and is estimated to reach RMB 17.9 trillion by 2024, with a compound annual growth rate of 23.0%.

Total premiums in the insurance market have rapidly increased over the past five years, with a compound annual growth rate of 16.1%. The total premiums for life and health insurance have grown faster than those for property and accident insurance. During the period from 2019 to 2024, it is expected that China's insurance market will continue to grow at a compound annual growth rate of 9.9%. During the period from 2019 to 2024, it is expected that life and health insurance and property and accident insurance will continue to grow steadily. Due to increasing demand, China's insurance penetration rate and density have been growing steadily in recent years. China's insurance penetration rate increased from about 3.13% in 2014 to 4.36% in 2019. Insurance density increased from RMB 1,451 per capita in 2014 to RMB 2,972 per capita in 2019, with a compound annual growth rate of 15.4% during the period.

Due to the comprehensive and objective services provided by independent insurance brokerage platforms, consumers tend to purchase insurance on such platforms, leading to an increase in consumer demand for independent services. The penetration rate of independent insurance brokerage platforms increased from 1.2% in 2014 to 3.4% in 2019 and is expected to continue growing during the forecast period, reaching 9.3% by 2024. During the period from 2014 to 2019, the compound annual growth rate of premiums insured through independent insurance brokerage platforms was 42.7%, and it is expected to grow at a compound annual growth rate of 34.6% between 2019 and 2024.

The strong demand for technology services by financial service providers and the growth potential of technology services have attracted new participants into the market. These participants have achieved rapid expansion with their large consumer bases or strong technical capabilities, such as big data, AI, and cloud computing. At the same time, driven by the rapid growth of the financial services industry, due to the fact that big data analysis technology can promote credit rating and effectively achieve precise marketing and more efficient customer management, China's financial industry has rapidly applied big data analysis technology. Financial service providers have now widely applied big data analysis technology in scenarios such as financial risk management and customer lifecycle management.

In 2019, the total revenue of China's financial big data analysis service market was RMB 1093 billion, of which RMB 323 billion was used for financial risk management and RMB 770 billion was used for customer lifecycle management, including acquiring new customers and managing existing customers. It is expected that the big data analysis service market will continue to grow from 2019 to 2024 and reach RMB 2524 billion by 2024, with a compound annual growth rate of 18.2%. Affected by the COVID-19 pandemic, in the first half of 2020, the business development pace of financial institutions slowed down, resulting in a decline in overall demand for big data analysis services.

Accurate, objective, and neutral big data analysis results are factors that customers value when seeking big data analysis services. Independent service providers can more accurately identify customer needs, avoid conflicts of interest, maintain objectivity and neutrality, and better serve customers. From 2014 to 2019, the market share of independent big data analysis service providers as a proportion of the total market share of financial big data analysis service providers increased from 2.3% to 9.7%, and it is expected to further increase to 16.8% by 2024.

According to the Frost & Sullivan report, the concentration of China's independent financial big data analysis solution market is relatively low. Calculated based on retail sales in 2019, the top five participants only accounted for a total market share of 27.9%, with the top four participants having significantly higher retail sales than other participants and collectively accounting for 27.7% of the market share.

In terms of relevant revenue in 2019, Bairong CloudTech is the largest independent financial big data analysis solution provider in China. Bairong CloudTech's market share in China's independent financial big data analysis service market is about 8.7%, increasing by 1.6% during the period from 2017 to 2019. During the same period, Bairong CloudTech's relevant revenue increased by a compound annual growth rate of 67.0%, while the market scale increased by a compound annual growth rate of 51.0%. In 2020, Bairong CloudTech's market share reached about 9.0%, an increase of 0.3% from its market share in 2019.

Frost & Sullivan has rich research experience in the financial and business service industries, assisting well-known enterprises to successfully list on the capital market. Successful listing cases include Excelforce (6989.HK), Huazhu (1179.HK), Zhongguancun Technology Leasing (1601.HK), Baolong Commercial (9909.HK), Travel Orange Culture (8627.HK), Yincheng Life Service (1922.HK), International Yongsheng (8441.HK), Xinyuan Property (1895.HK), Taihao Small Loan (1915.HK), CIH.NASDAQ, Haitong Hengxin (1905.HK), Asia Times (ATIF.NASDAQ), Liancheng Technology (8635.HK), Aoyuan Health (3662.HK), Jiazhaoye (2168.HK), Ruwei Asset Management (1835.HK), TradeGo (8017.HK), Baiying Lease (8525.HK), Ziyuan Yuan (8223.HK), Weixin Jinko (2003.HK), UnionPay World (1806.HK), Tianping Daohe (8403.HK), Junyi Global Finance (8350.HK), Shengye Capital (8469.HK), China Art Finance (1572.HK), Xingzheng International (8407.HK), Bank of China Leasing (1606.HK).