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Author | Xie Meiyu

Editor | Fu Ying

Source | Unicorn Finance

Kuaishou (1024.HK) has made another breakthrough in its financial layout.

Recently, the industrial and commercial information of Hainan Zhonghe Yunlian Technology Co., Ltd. (hereinafter referred to as "Zhonghe Yunlian") changed. Chengdu Kuaigou Technology Co., Ltd. (hereinafter referred to as "Chengdu Kuaigou") became the controlling shareholder of the company, and the legal representative was changed from Yu Qingquan to Tan Xuezhou.

After the equity penetration, Chengdu Kuaigou is a wholly-owned subsidiary of Beijing Kuaishou Technology Co., Ltd. (hereinafter referred to as "Beijing Kuaishou"), and Zhonghe Yunlian wholly owns Shanghai Shanda Insurance Brokerage Co., Ltd. (hereinafter referred to as "Shanghai Shanda Insurance").

Source: National Enterprise Credit Information Publicity System

In other words, Kuaishou acquired shares through a "curve"Obtained a 100% controlling insurance agency license.

Previously, Kuaishou’s financial business had always remained at the loan assistance level.This year, after obtaining the micro-loan license, the insurance agency license has also been obtained. What are the prospects for Kuaishou’s financial path?

1

"Quanqu" obtains insurance agency license

Chengdu Kuaigou is an e-commerce company established by Beijing Kuaishou in 2019 with a registered capital of 50 million yuan. Its business scope includes general projects such as technical services, technical development, and technical consulting, as well as licensed projects such as medical device Internet information services, pharmaceutical Internet information services, and radio and television program production and operation.

Previously, in October 2021, Chengdu Kuaigou expanded its business scope to include real estate brokerage.Kuaishou extends its tentacles into the real estate sector; in June 2022, Kuaishou Ideal Home Real Estate Business Center was officially establishedAccording to Kuaishou's annual report, as of the fourth quarter of 2023,The cumulative transaction volume of Ideal Home business exceeded 16 billion yuan。

Image source: Kuaishou financial report

Now, Chengdu Kuaigou has once again acquired Zhonghe Yunlian as a tentacle to expand Kuaishou’s business.Zhonghe Yunlian has a registered capital of 67 million yuan and belongs to the software and information technology service industry. Its business scope includes second-class value-added telecommunications services; online cultural operations; advertising; corporate management consulting; marketing planning, etc.

It is worth noting that Zhonghe Yunlian has a wholly-owned subsidiary, Shanghai Shanda Insurance.Shanghai Shengda Insurance was established in 2003 and is located in Shanghai with a registered capital of 50 million yuan.

The business scope of Shanghai Shengda Insurance includes formulating insurance plans for policyholders, selecting insurers, handling insurance procedures, assisting insured persons or beneficiaries in making claims, reinsurance brokerage business, providing clients with disaster prevention, loss prevention or risk assessment, risk management consulting services, and other businesses approved by the former China Insurance Regulatory Commission (operated with a license).

Image source: Canned Image Library

Zhi Peiyuan, a master's degree student enterprise tutor at the School of Management of China University of Mining and Technology (Beijing), believes thatKuaishou's move is aimed at expanding its business areas, seeking new growth opportunities, and leveraging its platform advantages to enter the insurance market.Its huge user base, rich data resources and technical strength provide strong support for the development of insurance business, but it also faces challenges such as compliance operations and risk control. "
Wu Gaobin, Secretary General of the Metaverse Committee of the World Digital Technology Academy, Executive Vice President and Secretary General of the New Productivity Working Committee of the China Association for Promoting Democracy, also said, “Kuaishou’s huge user base and rich data resources provide strong support for the precise promotion of insurance products;In addition, Kuaishou's social attributes can increase the popularity and acceptance of insurance products; and Kuaishou's advantages in content creation and distribution can help innovate and differentiate insurance products.”

But Wu Gaobin also analyzed and pointed out,Kuaishou’s professionalism in the insurance industry is still insufficient. The design of insurance products and risk control require a professional team and rich industry experience.In addition, the insurance industry is strictly regulated and has high compliance costs, which is undoubtedly a challenge for Kuaishou.”

2

After 4 years of dedicated operation, Kuaishou is "pursuing its dream of entering the financial circle"

"The end of the Internet is finance", and the premise of finance is a license.

Prior to the acquisition of the insurance agency license, on March 21 this year, the Guangzhou Local Financial Administration Yuexiu District Financial Work Bureau agreed that Guangzhou Huaduo Network Technology Co., Ltd. would hold100% of the equity of Guangzhou Huya Microfinance Co., Ltd. (hereinafter referred to as "Huya Microfinance") was transferred to Beijing Yunche Technology Co., Ltd., a subsidiary of Kuaishou.

Public information shows that Huanju Microfinance was established in January 2016 with a registered capital of RMB 500 million and its business scope is microfinance business.Huanju Microfinance was renamed Guangzhou Kuaishou Microfinance Co., Ltd.The company's director was changed from Wang Hui to Dong Yu, and the company's supervisor was changed from Xie Shuyu to Lu Shuyu.Kuaishou officially obtains a micro-loan license.

Image source: Canned Image Library

Despite facing many challenges, Kuaishou, which obtained two licenses this year, has accelerated its financial business layout compared to its previous situation of "0 licenses".Kuaishou's successful acquisition of micro-loan and insurance licenses will help it conduct financial business in compliance with regulations, enhance user trust, and further improve the financial ecosystem, strengthen user loyalty, and release user value.”

From the timeline,As early as 2020, Kuaishou began to advance into financial business, but has always remained at the level of traffic diversion and loan assistance business.

Currently, the "Borrow Money" page of Kuaishou App displays five loan products: "360 IOU", "Foreign Money Jar", "Paopaidai", "Shengbei" and "Zhongandai". The maximum loan amount is 200,000 yuan for each product. The page prompts that the products are all provided by formal institutions and Kuaishou only provides information display.

Image source: Kuaishou App

In addition, when it went public in Hong Kong in 2020, Kuaishou had made a high-profile statement in its prospectus that it planned to acquire a payment company for 850 million yuan.

According to an exclusive report by the financial information platform "Payment Encyclopedia" in November 2020, Kuaishou acquired YiLian Payment in the form of cash + stock, of which the cash was approximately RMB 300 million and the amount and value of the stock were unknown.However, in September 2021, "Payment Encyclopedia" reported that Kuaishou's acquisition of YiLian Payment failed to go through, and the matter may have become a variable until now.

The difficulty in obtaining a license is not just a problem for KuaishouFor example, in 2021, Bilibili purchased shares of Yongyi Payment for 118 million yuan. However, it has been unable to advance the equity change. At the end of February this year, it received the "Decision on Rejection of Administrative License Application" issued by the Ningbo Branch of the People's Bank of China, and Bilibili's payment license acquisition case officially failed.

Image source: Canned Image Library

Yuan Shuai, deputy secretary general of Zhongguancun Internet of Things Industry Alliance, believes that,As an Internet company, the difficulties in obtaining a financial license mainly lie in regulatory compliance, technical strength, financial strength, and market competition. The financial industry is strictly regulated, and Internet companies need to meet a series of complex regulatory requirements to obtain a license.”

Suffering from not having a payment license,In 2023, Kuaishou paid Tencent 1.581 billion yuan in payment channel fees.

Image source: Kuaishou financial report

but,In 2023, Kuaishou achieved full and full-year profitability for the first time since its listingThis may also be one of the important factors that enabled Kuaishou to successfully acquire two financial licenses.

3

Surrounded by giants, we meet again on the financial road

According to Kuaishou's 2023 performance report, Kuaishou's annual revenue exceeded 100 billion yuan for the first time, reaching 113.47 billion yuan, a year-on-year increase of 20.5%;In terms of profitability, after adjustments, Kuaishou's full-year net profit also exceeded 10 billion for the first time, reaching 10.27 billion yuan, far exceeding market expectations.。

In the first quarter of 2024, Kuaishou's profitability further improved, with total revenue increasing by 16.6% year-on-year to 29.4 billion yuan; adjusted net profit reached 4.39 billion yuan, setting a new record for a single quarter.

From a business perspective, the performance was also impressive. In the first quarter of 2024, Kuaishou's online marketing services, live streaming and other services (including e-commerce) contributed 56.6%, 29.2% and 14.2% of its revenue respectively; the operating efficiency of overseas business continued to improve, with revenue increasing by 193.2% year-on-year to 991 million yuan; e-commerce GMV increased by 28.2% year-on-year to 288.1 billion yuan.

However, as one of the leading short video platforms, Kuaishou still faces fierce competition from Douyin.In the construction of financial roads, Kuaishou is also "one step behind", Douyin began to test the financial business in 2018, and has been strengthening its financial fortress by continuously "spending gold".

In 2018, Douyin acquired Beijing Huaxia Insurance Brokerage Co., Ltd. through its subsidiary Fujian Bytedance Technology Co., Ltd.; in August 2020, Douyin's parent company completed the acquisition of Wuhan Hezhong Yibao Technology Co., Ltd. and obtained an online payment license.Douyin Pay was officially launched on the Douyin APP on January 19, 2021.

Image source: Canned Image Library

In January 2021, ByteDance Commercial Factoring Company was established; in October of the same year, Douyin acquired all the shares of Shenzhen Zhongrong Microfinance Co., Ltd. through its subsidiary.The latter's registered capital will be increased from 9 billion yuan to 19 billion yuan by the end of 2023.。
In June this year, Douyin was also approved to change the name of its payment company to "Douyin Payment Technology Co., Ltd."In addition, Douyin has launched auto insurance-related services on the platform, providing services such as policy inquiries and auto insurance quotes in its car owner service area.
In addition, Alibaba has Ant, Tencent has Tenpay, JD.com has Baitiao, Meituan has Yuefu... Leading companies such as Pinduoduo and Ctrip have also acquired financial licenses through acquisitions.

Image source: Canned Image Library

Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, believes that,Internet giants are actively deploying in the financial field in order to create a second growth curve for the company and achieve further monetization of traffic and diversified development of the company through financial business.”
Bai Wenxi further stated,This trend may have a certain impact on the traditional online insurance sales model.Because Internet platforms have stronger user stickiness and more accurate data support, they can provide more personalized services. But at the same time, traditional financial institutions still have advantages in professionalism and credibility, so the two sides may seek cooperation in competition and jointly promote the development of the financial industry. "

Surrounded by giants, Kuaishou is under great pressure to move forward on its financial path. Are you optimistic about Kuaishou's layout of insurance business?Let’s chat in the comments section.