Date
19 October 2017
Soufun is said to be investing 300 million yuan in a joint venture with a finance company to get into the internet finance business, targeting home buyers and property developers. Photo: Soufun
Soufun is said to be investing 300 million yuan in a joint venture with a finance company to get into the internet finance business, targeting home buyers and property developers. Photo: Soufun

Soufun’s bold lending venture

Rapid changes of Chinese companies have often caught investors unprepared. In Soufun’s (SFUN.US) case, that includes the name of the firm.

The real estate portal is reportedly planning to change its Chinese name and domain name, pending the result of an internal vote, according to Southern Metropolis Daily.

What grabs as much attention is the company’s recent move into internet finance.

A typical real estate online platform focuses on commission from property transactions and related advertising income. Soufun is thinking bigger than that.

The company is said to be investing 300 million yuan (US$48.3 million) in a joint venture with a finance company to get into the internet finance business, targeting home buyers and property developers.

Though not unrelated, earning almost risk-free income from matching property buyers and sellers is entirely different from managing the risk of making loans, especially in a market downturn. 

Investors drawn to the core business of Soufun may have to sit down and take a hard look at the company once gain.

Market sentiment toward the sector took a major shift in the past few months. In particular, excitement in online property portals cooled noticeably amid a sluggish property market and talks of developers delaying sales fees.

US-listed Soufun saw its market value halve from its March peak, putting a two-year rally to an abrupt stop.

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CG

EJ Insight writer

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