Hong Kong’s status as fundraising hub undeniable despite slump: LianLian DigiTech CEO

LianLian DigiTech, a Chinese digital payment services provider, is open to fundraising and merger and acquisition opportunities via Hong Kong, as it sees the city as an international financial hub despite cyclical volatilities, according to its top executive.

Xin remains confident in Hong Kong’s liquidity despite challenges brought by global uncertainties such as elections, interest rates and geopolitical tensions, he said in an interview.

“Global uncertainties have created an abnormal situation,” Xin said. “Once these die down, the global investment allocation will gradually return to normal, with capital flowing into the region’s economic growth areas.”

Mainland China’s manufacturing superpower status will remain attractive to investors, and so will Hong Kong’s stock and capital markets, he added.

When the market stabilises, LianLian will consider issuing additional shares or bonds for financing purposes, as well as mergers and acquisitions to expand its “growth potential based on a liquid and market-priced equity”.

Under the project, LianLian is exploring the use of digital currencies in global trade payment scenarios for the benefits of lower costs and faster services.

“We are actively spending time and effort to cooperate and invest in the next [stage of] financial development of Hong Kong,” Xin said. “We expect that Hong Kong will play an important role in the entire digital reshaping of China’s foreign trade and cross-border transactions.”

Established in 2009, LianLian has supported around 4.9 million small and medium-sized enterprises doing cross-border e-commerce trades and payments. It also provides 2,000 large mainland Chinese businesses with value-added services to improve their internal management and information systems.

The company touts its broad payment-licence coverage, such as being the only China-based digital payment solution provider to hold a licence in every US state. It had 64 payment licences and certifications worldwide as of the end of 2023 and operates in over 100 countries to support more than 130 currencies.

LianLian focuses on providing payment services to businesses, not end-consumers, positioning it as a partner with, rather than a competitor to, Alipay and WeChat Pay.

For example, LianLian is the only Chinese firm with a designated payment services licence in Thailand, which allows other consumer-facing payment companies to work with LianLian to provide their services in the country, Xin said.

“Our capabilities are twofold,” he said. “While we help Chinese businesses sell to global markets, our capabilities can also help local merchants. Meanwhile, we can also provide corresponding services for Chinese companies going overseas.”

In the first half of this year, LianLian’s revenue grew 40.1 per cent year-on-year to 617.4 million yuan (US$86.5 million), while its net loss narrowed 8.5 per cent to 350 million yuan, according to its financial results announced on Tuesday.