Jiangsu's first energy internet financial platform's transaction volume exceeded 1 billion yuan

China Energy Storage Network: Less than five months after its launch, Guoxin's transaction volume exceeded 1 billion yuan. As the first Internet financial platform established by an energy company in Jiangsu, its unique business model and profound impact on the photovoltaic industry are more worthy of attention than the staged transaction volume.

Guoxin Law Firm was established based on China's largest non-public energy enterprise, GCL Holdings, and integrates the three elements of energy, finance, and the Internet. What kind of "chemical reaction" will it produce?

Financing with "IOUs" and suppliers paying back in advance

The expected annualized return is 6.5%-7.3%, the project period is 36 days, and the financing amount is 973,870 yuan. This is the latest financial product launched by Guoxin Law Firm. The financing amount of general financial products is an integer, so why does Guoxin Law Firm's financial products have decimals?

This is a receivable held by a silicon wafer and battery module manufacturer in Suzhou, which was publicly transferred through Guoxin. When the receivable matures, another photovoltaic company will bear the payment responsibility. The two companies are upstream and downstream in the industrial chain.

"Photovoltaic is a long-cycle, long industrial chain industry. Each sub-segment is led by large enterprises and gathers a large number of small and medium-sized suppliers." Cao Yin, chief researcher of China Cinda Securities, introduced that generally, large enterprises purchase products or services from small and medium-sized suppliers, write an IOU first, and settle the payment within 3-6 months.

The biggest concern of enterprises in production and operation is the difficulty of collecting payments. They cannot collect money from the products they sell or collect it too slowly. Guoxin, which focuses on supply chain finance in the new energy industry, came into being. According to the process, small and medium-sized suppliers sign trade contracts with large enterprises, issue invoices after the goods are inspected and accepted, and after the large enterprises confirm the payment period, the suppliers apply for financing from Guoxin. After the qualifications and risks of both parties are reviewed and approved, Guoxin launches financial products to attract investors and makes loans when the amount is full.

This is equivalent to suppliers using "IOUs" as collateral and paying low interest costs to get the receivables in advance. "The online financial products are basically sold out on the same day, and the money can be given to suppliers the next day." Chen Jiansong, CEO of Guoxin Law Firm, said that suppliers who apply for the first time can get their money back in an average of one week, and mature customers can get their money back in three days.

Not limited by geographical location or time, financing cost is lower than that of banks

Compared with traditional bank financing, Internet finance breaks the restrictions of region, term and amount, and meets the scattered funding needs of small and medium-sized enterprises.

In terms of geography, if a Jiangsu enterprise wants to borrow money, it will be difficult for local banks in Shanghai or Zhejiang to complete it across provinces and cities; in terms of term, banks generally do full-term projects of 6 months, a year or even longer, but the actual capital turnover demand of an enterprise may be only 30 to 50 days; in terms of amount, supply chain finance is highly consistent with the production and operation of enterprises. An order may be hundreds of thousands of yuan or one or two million yuan, with both small and large amounts, and the bank's single loan amount to an enterprise is relatively large.

The annualized rate of return of Guoxin Law Firm has gradually dropped from about 8.5% at the beginning to 7%-8%, and now it is basically 6%-7%. "This shows that the cost of funds is getting lower and lower." Chen Jiansong analyzed that the annualized rate of return is the comprehensive cost of the supplier to obtain funds. In addition to interest, it also includes the platform commission that is lower than the industry average. Compared with the average interest rate of about 10% for small and medium-sized enterprises in bank financing, Guoxin Law Firm has obvious advantages.

"The key to reducing corporate operating costs is to reduce financing costs, and supply chain finance provides a market-based cost reduction channel," said Fei Fangyu, professor of economics at Shanghai Jiao Tong University.

Hundreds of indicators are used for credit rating, and the review is stricter than that of banks

When it comes to Internet finance, risk is an unavoidable keyword - what is the financial status of the debtor, and can it guarantee repayment upon maturity?

Among the more than 200 financial products developed by Guoxin, most of the debtors are from the energy industry where its parent company, GCL Holdings, is located. "Leading companies in the industry have inherent advantages in supply chain finance. They can not only integrate resources to develop high-quality projects, but also grasp the every move of upstream and downstream companies and the clues of market conditions, and effectively control risks." Fei Fangyu pointed out. Guoxin has established a risk control system with hundreds of indicators based on big data technology.

Cooperation is not only between leading enterprises and small and medium-sized suppliers, but also between suppliers and leading enterprises. "Once 60%-80% of enterprises in the industrial chain carry out financial cooperation, the problem of excessive accumulation of accounts receivable will be completely resolved and the utilization efficiency of market funds will be improved." Chen Jiansong said frankly that as the three-dimensional network of the platform becomes more and more perfect, it can realize interactive verification between enterprises, and fundamentally prevent data forgery and distortion through real-time contracts, tax bills and other information, "which is stricter and more complete than the audit system of existing financial institutions."

"Energy + Finance + Internet" builds a new ecosystem. In fact, the market potential is not limited to the energy field. Experts point out that Jiangsu's trade and retail, transportation, textile and clothing industries are large in scale and can fully cultivate a group of Internet financial platforms based on supply chain cooperation and with distinct industry characteristics.