SY Commercial Factoring Co., Ltd. ("SY Factoring"), a wholly-owned subsidiary of SY Holdings Group Limited ("SY" or the "Group", stock code: 6069.HK), has recently formally signed an insurance agreement with Tianjin Branch of China Export & Credit Insurance Corporation ("Sinosure"), obtaining approval for a $100 million export credit insurance facility. This development marks the establishment of an innovative "commercial factoring + export credit insurance" model that will empower Chinese SMEs to expand globally and facilitate the internationalization of Chinese manufactured goods.
With support and guidance from multiple government departments including Tianjin Binhai New Area Administration and the People's Bank of China Binhai New Area Branch, SY Factoring has achieved a significant breakthrough by collaborating with Bohai Bank Binhai New Area Branch. Leveraging Bohai Bank's "Bojintong" product, they successfully implemented China's first "integrated domestic/foreign currency escrow account + priority claim rights" model to provide customized international factoring services with foreign currency settlement for Tianjin Huatu Auto Logistics, a designated used vehicle export pilot enterprise. This innovative solution addresses critical challenges in international factoring including fund management and payment security while complying with import/export and foreign exchange regulations, creating dual protection through legal and insurance mechanisms. Looking ahead, SY plans to first target China's RMB 40 billion used vehicle export market before expanding into other export sectors, gradually entering China's massive RMB 20 trillion+ trade export market to establish a new high-growth revenue stream.
China's foreign trade ecosystem now includes over 600,000 businesses with import/export operations, with SMEs becoming the main force in global expansion. However, these companies face multiple challenges including average 75-day payment cycles in foreign trade, substantial upfront capital requirements for domestic procurement, and credit risks from overseas buyers (including payment delays, order rejections, and bankruptcy risks). In December 2023, the General Office of the State Council issued Several Measures to Accelerate the Integrated Development of Domestic and Foreign Trade, emphasizing enhanced credit insurance functions and improved credit systems while encouraging businesses to utilize credit reports, insurance, and factoring services. In August 2024, following review by the State Council executive meeting, Several Policy Measures to Further Support the High-Quality Development of Tianjin Binhai New Area were issued, explicitly supporting commercial factoring development, particularly international factoring. In December 2024, Tianjin Free Trade Zone issued the Guiding Opinions on Supporting the High-Quality Development of International Commercial Factoring, further removing obstacles for international commercial factoring development.
A Tianjin Binhai New Area official stated: "Following the operational guidelines in the Guiding Opinions, the commercial factoring industry has introduced this nationally pioneering 'integrated domestic/foreign currency escrow account + priority claim rights' model. While complying with foreign exchange management requirements that mandate 'exporters must receive foreign exchange', the integrated account system enables commercial factoring companies to efficiently consolidate and precisely manage cross-border fund flows, allowing convenient operations for both RMB and foreign currencies within the same account framework. This significantly simplifies settlement processes and improves capital efficiency. Moreover, the priority claim rights obtained by commercial factoring companies provide solid risk protection for international factoring operations, ensuring that when facing complex international market conditions and potential risks, factoring companies can promptly safeguard their own and clients' legitimate rights and interests. As one of Tianjin's first pilot enterprises innovating international factoring models, SY Factoring has insured this transaction with Sinosure under guidance from Tianjin Binhai New Area, creating a valuable trial of the new 'commercial factoring + export credit insurance' model. This initiative not only effectively helps exporters accelerate capital turnover and reduce buyer credit risks, but also makes the entire international factoring service process more stable and reliable."
Tianjin Huatu Auto Logistics commented: "China's used vehicle exports are expected to reach 400,000 units this year with export value exceeding RMB 40 billion, representing a new growth driver for China's auto exports. As one of Tianjin's designated used vehicle exporters, we've caught this wave of China's automotive globalization, ranking among the top tier in Tianjin's industry for three consecutive years with projected 2024 exports exceeding RMB 700 million. However, export collection cycles are significantly longer than domestic trade, creating financial pressure for used vehicle exporters. Trading companies typically lack substantial fixed assets, making traditional financing challenging. In this context, the emergence of 'commercial factoring + export credit insurance' services acts as a catalyst for industry development. Taking this export transaction as an example: first, it enabled two-month earlier payment, accelerating our working capital turnover; second, successful Sinosure insurance coverage reduced foreign exchange collection risks; third, it created a new financing channel based on genuine trade and accounts receivable transfer, solving 'first loan' and financing difficulties. This makes business operations much more convenient for used vehicle exporters, whether for covering operational expenses or expanding overseas presence."
Sinosure is a state-owned policy insurance company established with government funding to support China's foreign trade development and cooperation. As China's only policy-oriented insurer, Sinosure provides payment risk protection and financing support for companies expanding overseas through its professional underwriting capabilities and robust data resources. By 2023, Sinosure had cumulatively supported over RMB 58 trillion in domestic and international trade and investment, provided credit insurance and related services to more than 310,000 enterprises, and facilitated over RMB 4.8 trillion in policy-backed financing through nearly 300 partner banks. Sinosure's Tianjin Branch has long focused on international factoring industry development, innovating business models and optimizing insurance services to help companies expand in international factoring markets amid evolving industry and supply chain trends.
Credit insurance commonly safeguards corporate accounts receivable security, naturally complementing commercial factoring companies' receivables-based financing services. This policy primarily insures buyer credit in factoring transactions, covering risks commercial factoring companies may face after acquiring exporters' overseas receivables, with maximum compensation reaching 90% of actual losses. Covered risks include political risks such as foreign exchange controls, import restrictions, third-country payment moratoriums, and war in buyer countries/regions, as well as commercial risks including buyer bankruptcy, insolvency, and payment defaults. Therefore, this policy serves as an effective risk hedging tool for commercial factoring companies' export factoring operations.
The "commercial factoring + export credit insurance" model differs significantly from "bank factoring + export credit insurance" in customer eligibility. Bank factoring primarily evaluates applicant qualifications, typically requiring sufficient collateral like plants or equipment that trading and distribution companies often lack. SY adheres to a "transaction-focused, entity-light" risk management philosophy, emphasizing underlying trade authenticity and reasonableness, significantly improving SME access to inclusive financial services. Notably, while China's annual export credit insurance covers over RMB 6 trillion in receivables, less than 10% obtain factoring financing. Through ecosystem integration and data connectivity with Sinosure, SY provides an innovative export trade financing solution for SMEs while helping reduce their export credit insurance costs.
"Thanks to strong policy support for 'going global', Chinese companies continue accelerating worldwide expansion," said an SY representative. "We remain committed to serving the real economy through financial services. For SME exporters, this model delivers four key benefits: First, financing convenience - serving as a 'door opener' for export financing to enhance creditworthiness and financing capacity while alleviating working capital pressures and solving 'first loan' difficulties. Second, risk protection - providing payment risk coverage to accelerate fund recovery and effectively prevent losses. Third, market expansion - enabling exporters to more confidently explore international markets and expand business scope for global presence. Fourth, competitiveness enhancement - reducing operational risks allows exporters to offer more competitive trade terms and pricing internationally, attracting more overseas buyers."
Moving forward, SY will strengthen collaboration with Sinosure to identify SME exporters' financing needs and deliver efficient, cost-effective international factoring services, supporting China's efforts to expand high-level openness and cultivate new drivers for foreign trade development.
