By Vladimir Soldatkin
VLADIVOSTOK, Russia (Reuters) -Digital platform Qifa, which focuses on trade between Russia and China, has delayed its initial public offering on the Moscow Exchange due to high Russian interest rates and a challenging business environment, its founder Sun Tianshu told Reuters on Tuesday.
Sun said the 1.7 billion roubles ($18.9 million) IPO in Moscow had been planned initially in August with sale of around 20% of the company's shares.
"Now, it's October or November. That's after the key interest rate hike and as the general environment on the stock exchange became more difficult. So, for our future investors we decided to postpone it," Sun Tianshu told Reuters on the sidelines of Russia's Eastern Economic Forum in Vladivostok.
According to Qifa, its revenue jumped 75% in 2023 to 5.7 billion roubles. Sales of consumer goods, such as shoes and clothes, account for the bulk of revenue.
Russia's central bank hiked its key interest rate by 200 basis points to 18% in July, the highest level in more than two years, and vowed to continue tightening until inflation rates in an overheated economy come down.
The central bank holds next rates-setting meeting on Sept. 13.
Moscow and Beijing have resorted to complex steps to try to avoid payment delays, including a workaround using small, regional Chinese banks, as the threat of secondary U.S. sanctions on Chinese banks that facilitate trade with Russia deters larger lenders.
Until last year, Qifa's primary focus was the import of Chinese consumer goods to Russia, but it launched bilateral trade this year, charging commission from buyers in China in yuan.
Speaking at the annual forum in Russia's far eastern port of Vladivostok, Sun Tianshu said there were still many barriers in Russo-Chinese bilateral trade.
"Now it's like a push-button phone, whereas it should be like a smartphone," he said, adding that it still has a potential to boom to the annual turnover of around $400 billion from a record-high $240 billion in 2023.
Some Russian companies are facing growing delays and rising costs on payments with trading partners in China, leaving transactions worth tens of billions of yuan in limbo.