Author: Jennifer Chan
With the health of stocks at stake, the company formerly known as China Rapid Finance Ltd completed an “asset injection” in late July with Yao Bao Two Ltd., the parent company of SOS Information Technology.
The “new” company, which trades under the symbol (NYSE: SOS), now focuses on the healthcare and emergency services sector. Specifically, it provides data, technology and marketing-related solutions to emergency healthcare services in China.
Shares soared nearly 5% to $2.26 per U.S. Custodian share today after it announced it had completed the sale of its peer-to-peer (P2P) lending operations, finally getting rid of remnants of the business inherited from China Rapid after new Chinese regulations quickly sent the former company and its stock into decline.
The research and big data developer reiterated China’s P2P lending issues when announcing the sale, saying in a statement that “recent government regulations” in China have given peer-to-peer businesses a limited opportunity to develop oneself”.
The Qingdao-based company isn’t the only one in the space that has made efforts to move away from the Chinese P2P sector. Golden Bull Ltd. (Nasdaq: DNJR) and Jiayin Group (JFIN) did the same.
Long before Covid-19, Chinese regulators forced companies operating in the industry to shut down. Since the crackdown began in 2016, nearly 5,000 companies have fled the P2P sector, as Caixin Global reported in April. By March, the number of P2P companies operating in the sector had dropped to 139, representing an 86% decline since the start of 2019, according to the report.
Proceeds from sale for working capital and general purposes.
“The legacy P2P activity had to be eliminated so that we could focus all our energy on achieving our vision of becoming a leader in China’s health and emergency services industry,” said Yandai Wang, chairman of SOS. , in a press release. statement today.
He added: “We are excited about what the future holds.”
The company last reported $32.5 million in revenue, down 43% year-over-year in its third-quarter financial statements. Net loss narrowed to $22.8 million, or 34 cents per share, from $51.8 million, or 79 cents per share.
Shares of SOS are down almost 39% since the start of the year.