The venture, called JD-ZestFinance Gaia, will focus on the development of consumer credit in China, the companies said. The JV will use JD.com's consumer data and ZestFinance's machine-learning-based credit-decision technology to provide companies in China credit risk evaluating services.
JD.com will also make an investment in ZestFinance to help fund further development of the credit risk evaluating services and to extend consumer access to credit under the agreement.
"Today's announcement with ZestFinance, a leader in consumer credit evaluation, is a foundational step toward building a reliable system for assessing credit risk that will help meet the huge market need," JD Finance CEO Shengqiang Chen said in a statement. "We aim to be the single-stop solution for Chinese consumers to make all of their daily purchases, and this new JV with ZestFinance is another big step in our development."
Shares of JD.com are down 3.4% to $32.88.
TheStreet Ratings team rates JD.COM INC -ADR as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate JD.COM INC -ADR (JD) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."