Lakala Payment Co., Ltd. ("Lakala") submitted an application to the Hong Kong Stock Exchange (HKEX) on October 17 for a proposed H-share listing on the main board. If successful, this would establish Lakala as a dual-listed entity with "A+H" shares.
Founded in January 2005 as Qiankun Times, Lakala initially focused on electronic billing services before rebranding in 2009 and shifting to merchant acquiring and corporate payment services. The company went public on Shenzhen’s ChiNext board in April 2019 (Stock Code: 300773), with Legend Holdings remaining its largest shareholder at 23.54%.
Despite leading China’s independent digital payment sector with a 9.4% market share in 2024 (processing over RMB 4 trillion in total payment volume), Lakala faces mounting challenges. Revenue fell to RMB 57.54 billion in 2024 from RMB 59.28 billion in 2023, while Q1-Q3 2025 revenue dropped 7.33% YoY to RMB 40.7 billion. Net profit volatility is stark: after a RMB 1.438 billion loss in 2022, profits slid to RMB 351 million in 2024 and fell another 33.9% YoY in 2025’s first three quarters.
Key pressure points include: - **Shifting payment trends**: Declining card usage and stricter merchant vetting reduced core digital payment service revenue (90% of total), which carries lower margins (27.2% in 2024) versus high-margin digital business solutions (89.4%). - **Liquidity strain**: Net current liabilities persisted in 2022, 2024, and H1 2025, while operating cash flow plummeted 63.32% YoY by Q3 2025. - **Shareholder exits**: Legend Holdings sold 3% of shares (23.64 million) from July–September 2025, following co-founder Sun Haoran’s 2.45% divestment.
Regulatory headwinds compound these issues. China’s May 2024 *Non-Bank Payment Institutions Supervision Regulations* tightened compliance requirements, potentially raising costs. Lakala’s IPO prospectus highlights this as a top risk alongside intensifying competition from Alipay, WeChat Pay, and emerging rivals like Douyin Payment and Meituan Pay.
To pivot, Lakala plans to: 1. **Expand overseas**: Cross-border payment volume grew 73.5% YoY in H1 2025 but still only accounted for 1.6% of total payments. 2. **Pursue "Payment+" solutions**: Integrating SaaS and banking partnerships to diversify beyond transaction processing.
The Hong Kong listing aims to fund these strategies, but success hinges on execution amid a crowded payments landscape. Industry analysts note that pure payment services are now a "stock game," forcing players like Lakala to either tap cross-border growth or deepen value-added services.
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