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China online consumer finance platform 360 Finance mulls acquisitions after IPO

Following its US$51.2 million IPO in the U.S., Chinese online consumer finance platform 360 Finance Inc. plans to boost its revenue and user base through acquisitions of competitors as well as artificial intelligence and big data companies.

Shares of the Shanghai-based company were listed on the Nasdaq Global Market on Dec. 14.

The company is looking to acquire high-traffic mobile lending platforms and AI technology companies that help improve risk management and user experience, CEO Jun Xu told S&P Global Market Intelligence. "We are scanning the whole ecosystem and will identify the right targets to look at," said Xu.

Xu added that the company is looking at digital lending platforms in China that have high traffic but are not "properly monetizing their user bases."

360 Finance, which started operating in July 2016, is a financial arm of 360 Group, which was known as Qihoo 360 Technology Co. Ltd. before it was privatized and delisted from the NYSE in June 2016. It reported a net income of 102.7 million yuan in the quarter ended Sept. 30, after posting losses for two straight quarters, according to its Dec. 11 IPO prospectus. Its outstanding loan balance stood at 34.3 billion yuan as of end-September.

Unlike peer-to-peer lenders, which are under increasing scrutiny and clampdown in China as the government takes aim at fraud and shadow banking, 360 Finance mainly matches borrowers with traditional banks and assess the borrowers' creditworthiness, Xu said.

"We have no plans to become a bank," he added.

The company said the average delinquency rate among its prime borrowers, with annual disposable income between 25,000 yuan and 50,000 yuan, is around 2% as of end-September.

As of Dec. 14, US$1 was equivalent to 6.91 Chinese yuan.