Yinfu Gold Corporation (ELRE) is in the process of acquiring Dongguan YouDai Financial Information Services Co (YouDai), a peer-to-peer platform, from Eternal Fairy International (EFI).
ELRE has an agreement to acquire 100% of the shares and assets of EFI for US$600 million to be paid by the issuance of 1.2 billion common restricted shares of ELRE. This deal should complete on the 15th February.
YouDai is an internet financial services company, which operates a peer-to-peer platform among other financial services. These other services include advice for financing, corporate investment and loans applications, as well as industrial investment, equity investment and asset management.
Mr. Liu Jun, the Chairman of the Board of ELRE, commented:
"YouDai has been profitable in the P2P lending platform market in China and ELRE is working to increase its P2P lending market share in China. We believe that the acquisition of YouDai is an important step toward that goal."
The Chinese P2P sector has grown at an extraordinary rate, with around 1500 platforms in operation. However, the number of fraudulent platforms and platforms closing down continues to rise. Recently a Chinese credit rating agency published a blacklist and an early warning list of P2P platforms they considered to be highly risky. The blacklist contained 266 internet finance platforms and 676 platforms were on the early warning list. The news of this acquisition is a sign a much needed period of consolidation may at last be underway in the Chinese P2P sector. The space will have more credibility and ultimately be more successful if we see this consolidation continue.
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