【正文】 via third party payment panies is growing and now prise 40% of retail. (US: thirdparty 7%。 and 2) smallticket consumption loans. The core of a lending business is to price the credit and liquidity risks. We see significant potential value added for bigdatabased credit pricing to traditional lending services. However this is yet to be tested over time and through cycles. We also believe that 1) the ultimate number of winners may be much smaller than the vast number of disruptors who claim to own the best algorithm already。A deals in the thirdparty payment sectors since 20xx. There are still 250+ thirdparty payment licenses available, but only 120 of them are allowed to handle online payment – out of which, we believe there are only 2040 licenses that are not already been bought by or associated with a sizeable player from adjacent industries. (p. 6465) Goldman Sachs Global Investment Research 8 Goldman Sachs Global Investment Research 9 China: Technology August 7, 2017 Online savings/investment Tianhong Asset Mgmt. 51% Ant Financial 33%1 Ant Fortune 100% Ant Financial 33%1 55%3 Licaitong 100% Tencent JD Wealth Mgmt. 100% JD Finance 40%2 Tiantian Fund Distrn. 100% Eastmoney MachineGene Inv. 100% China M erchants Bank JD Finance 40%2 Baixin Bank 30% Baidu EloanCN 33% Lenovo Holdings Hongling Capital Renrendai Dianrong Standard Chartered Ppdai China FinTech Key Players A sample of panies with exposure Payment Alipay 100% Ant Financial 33%1 Alibaba Group Tenpay 100% Tencent China UMS 60% China UnionPay 99Bill 96% Wanda Group Ping An Ewallet 77% Ping An Group CPCN 92% China UnionPay JD Pay 100% JD Finance 40%2 15% Tencent China PnR Lakala 31% Lenovo Holdings Yifubao 60% Suning Commerce Group 18% Suning Applian ce Group Union Mobile Pay 100% Qingdao Haili Metal One Baofoo 100% Mandao Financial Service Baidu Wallet 100% Baidu Inter lending Lufax 55%3 Ping An Group Yirendai 84% CreditEase Holdings Alibaba Micro Loan 100% Ant Financial 33%1 Alibaba Group MYbank 30% Ant Financial 33%1 Alibaba Group WeBank 30% Tencent Tenpay Micro Loan 100% Tencent 15% Tencent Lufax Ping An Group Alibaba Group Alibaba Group 15% Tencent Personal credit scoring Zhima Credit 100% Ant Financial 33%1 Alibaba Group Qianhai Credit 100% Ping An Group Tencent Credit 100% Tencent Kaola Zhengxin 32% Lakala 31% Lenovo Holdings China Chengxin Credit Sinoway Credit 15% Tsinghua University Onlineonly insurance Zhong An Online Pamp。 Michelle Cheng。 Ryan Nash, CFA。 Richard Manley。 Andrew Lyons。 Frank Shi。 Eliot Camplisson。 Thomas Wang。 total cashless 75% by 20xx). We expect this to rise to 68% by 2020. (p. 5556) In China, traditional bank cards? average transaction size of US$930 is almost 10X larger than thirdparty payment?s average transaction size of $88. (p. 24) 10x USER BASE There are in total thirdparty payment accounts in China (20xx). (p. 47) GAMIFICATION OF CASH 14bn virtual ?red packets? (China?s traditional cash filled red envelope that people give each other during festivals) were exchanged via WeChat Pay on Chinese New Year?s Eve Alipay: 520mn (Mar 2017) Tenpay: 600mn (Dec 20xx) For context, Paypal has 197mn users globally (Dec 20xx) in 2017. (p. 43) Future of Finance: The Rise of China FinTech August 7, 2017 Goldman Sachs Global Investment Research 4 Portfolio Manager?s Summary Why read this report? See five realworld case studies for payments on pages 2526, 43, 48, 53 Infographic on China FinTech ecosystem: Pages 67 List of key players: Page 9 Total addressable market Trend 1: Integration Ne w conglom er ate Ecosystem Closedloop Trend 2: Regulation Progrowth Risk management Private capital participation Regulatory changes and new technologies are reshaping China?s banking activities. The pace and magnitude of the development is vastly different versus the rest of the world. A group of hybrid tech/finance panies, such as Ant Financial, Tencent, JD and Ping An have emerged at the heart of China?s financial industry, making financial services more convenient and accessible for consumers. This has resulted in China leapfrogging from a world where consumers largely relied on cash, to cashless or even cardless transactions, paying, borrowing and investing, all through their smartphones. We expect the changes to continue over the next 510 years, with new entrants emerging and new profit pools being created. Within this report – our first in a series – we lay out addressable markets with large untapped consumer demand, then explain three key shaping trends that investors need to understand about the China FinTech space before looking at individual business lines, such as the high integration, evolving regulations and internationalization. Lastly, we focus on thirdparty payment, an area with the most innovations so far, through ?realworld? cases and a deep dive into business models. In our view, payment is a crucial gateway to most other services, and where the innovators have gained the strongest footholds in China. Untapped consumer demand drives FinTech opportunities: Historically, the traditional banks in China focused more on serving the stateowned enterprises, leaving the financial needs of consumers and SME?s underserved. As China?s ec