Sino Mercury scouting for financial assets to expand presence

Nasdaq-listed Sino Mercury Acquisition Corp is seeking financial assets in China and aims to become an Internet-based financial holding group with annual transaction volume of about 50 billion yuan ($8 billion) in 2020, Chief Executive Officer Jimmy Hao told China Daily.

"This is a golden time for doing mergers and acquisitions in China because the economy is slowing and many entrepreneurs are willing to sell their companies at low prices," he said.

"Small and medium-sized enterprises have played an important role in China's economic development, but they are not able to receive good financial support in the current financial environment, so we want to seek opportunities in the financial sector to help solve the problem," said Hao.

According to Hao, rather than banks, securities and insurance companies－sectors that have high entry barriers－his company will seek financial leasing, guarantee, commercial factoring, small loan and peer-to-peer companies to acquire.

Factoring is a financial transaction in which a business sells its accounts receivable to a third party (a factor) at a discount.

Peer-to-peer financing involves lending money to unrelated individuals, or peers, without the use of a traditional financial intermediary such as a bank.

The company announced in April that it had agreed to merge with Wins Finance Group Ltd, a leading integrated lending solution provider in China mainly serving SMEs in Shanxi province.

The deal is expected to be completed in the third quarter of 2015.

"This is our first step for setting up an Internet-based financial holding group, and we will acquire more financial companies and integrate them into the group," said Hao.

He said that his company wants companies with strong risk controls, large client bases and assets of more than $50 million.

Hao said he believed China's economy would benefit from economic reforms and more SMEs would get better financial support.

There were 1,243 deals announced in China's M&A market in the first quarter, with total value up 39.2 percent to $148.3 billion, according to the ChinaVenture Group.

The firm said the finance sector was the most popular, followed by manufacturing and information technology.

Ma Si contributed to this story.