Author|Ning Chengque

Source|Bowang Finance

Another mainland payment company is aiming for the Hong Kong stock market.

Recently, third-party payment institution Fuyou Payment submitted a prospectus to the Hong Kong Stock Exchange, becoming another mainland payment company to target the Hong Kong stock market after Lianlian Digital.

According to Frost & Sullivan report data, Fuyou Payment ranks first in China's independent integrated digital payment service provider's aggregated acquiring market, accounting for 12.9% of the market share in terms of transaction volume in 2022.

Fuyou Payment's path to listing has been quite bumpy. In 2015, 2018, and 2021, Fuyou Group and Fuyou Payment attempted to go public on the A-share market three times, but all were terminated during the counseling period.

Notably, Fuyou Payment's net profit and gross profit margin have shown a declining trend in recent years, and its business structure lacks sufficient competitiveness. Additionally, Fuyou Payment has been repeatedly penalized by regulators due to compliance issues.

Even more concerning for investors is that Fuyou Payment conducted a significant dividend distribution before submitting its prospectus. Such behavior has further clouded Fuyou Payment's path to listing.

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With a compound annual growth rate of 16.90%, what's Fuyou Payment's background?

Founded in 2011, Fuyou Payment holds a "Payment Business License" issued by the central bank. Additionally, the company also has payment licenses in Hong Kong and the United States, providing comprehensive digital payment services and business solutions to various clients.

Most of Fuyou Payment's founding team and middle-to-high-level management have senior industry backgrounds from China UnionPay, commercial banks, and well-known internet companies, which has enabled the company to quickly emerge in the payment field. By 2023, the company had completed the integration of mainstream card organizations such as UnionPay, NetUnion, American Express, VISA, MasterCard, JCB, and Discover, and established cooperative relationships with over 600,000 enterprises.

Its business scope primarily includes comprehensive digital payment services and digital business solutions, with the former being its primary source of income. From 2021 to 2023, the comprehensive digital payment service business accounted for over 90% of the company's revenue.

From the revenue data, Fuyou Payment achieved rapid growth in the past three years. From 2021 to 2023, the company's revenue reached 1.102 billion yuan, 1.142 billion yuan, and 1.506 billion yuan, with a compound annual growth rate of 16.90%.

This growth is mainly attributed to the rapid growth of the domestic payment industry. According to statistics, China's total payment volume (TPV) grew from 40.294 trillion yuan in 2019 to 51.437 trillion yuan in 2022, with a compound annual growth rate of 8.5%. It is predicted that this figure will reach 67.505 trillion yuan by 2028, with a compound annual growth rate of 5.2% from 2023 to 2028.

According to the prospectus data, in terms of the key indicator "Total Payment Volume" (TPV) of payment enterprises, the company's annual processed TPV increased from 1.7 trillion yuan in 2021 to 2 trillion yuan in 2023, with a compound annual growth rate of 7.8%. The number of annual processed transactions on the platform increased from 7.2 billion in 2021 to 11.9 billion in 2023, with a compound annual growth rate of 28.6%.

Since its inception and as of the end of 2023, Fuyou Payment's