Key facts
- Kaidianbao Payment Service Co. Ltd. has applied for bankruptcy liquidation.
- A Shanghai court will hold a hearing on July 16.
- The company will suspend payment services and begin exiting existing business.
- Kaidianbao plans to complete risk cleanup by December 20, 2024, and suspend all services after December 31, 2024.
- ST Yalian previously held a stake in Kaidianbao Technology but sold it.
Kaidianbao Payment Service Co. Ltd., once a significant third-party payment provider in China, has filed for bankruptcy liquidation. This move comes as increased regulatory scrutiny intensifies a shakeout within the nation's payment sector. A Shanghai court has set July 16 for a hearing regarding the liquidation.
Kaidianbao announced it would suspend its payment services and begin an orderly exit and cleanup of its existing business due to changes in its operating conditions. The company stated that it aims to complete the cleanup of operations with identified risk factors by December 20, 2024, and will suspend all remaining payment services after December 31, 2024.
Founded in February 2006, Kaidianbao received its payment business license from the People's Bank of China in 2011 for bank card acquiring services nationwide. Its license was renewed in 2017 to include regional prepaid card issuance and acceptance in Zhejiang, Shandong, Fujian, and Guangdong provinces.
ST Yalian (002316.SZ) had previously acquired a 45% stake in Kaidianbao Technology, the parent company, for 945 million yuan in 2016, entering the third-party payment business. However, ST Yalian sold this stake through a judicial auction in November 2022. Financial reports from ST Yalian indicated that Kaidianbao's revenue experienced a decline from 2017 to 2022, with operating revenue falling from 1.92 billion yuan in 2017 to 1.01 billion yuan in the first eleven months of 2022. Net profit also fluctuated, showing a loss in 2020 before recovering in subsequent periods.