Depth | Solve core pain points, blockchain opens up new space for supply chain finance

Author: Song Jiaji, Renhe Yi

Source: Keith Communication

 

Summary

Blockchain + supply chain finance opens up new market space. Blockchain has the characteristics of immutable data and traceability, which is the key to solving the pain points of supply chain finance. Blockchain not only solves the problem of informatization. Once the business of supply chain finance is on the chain, it can solve the problem of enterprises. The issue of mutual trust between (especially small and medium-sized enterprises) and financial institutions has greatly expanded the business space of supply chain finance and upgraded the industry model. This is the core pain point of the supply chain financial market, and it is also the key point to solve the financing difficulties of SMEs. Blockchain has opened up a new model for the supply chain finance industry and opened up new market space. The blockchain + supply chain financial solution enables core companies to transfer credit at multiple levels, enhance the ability to monitor goods and the ability to grant credit risk, greatly reduce the threshold for corporate loans, and further increase the market penetration of supply chain finance. According to the forecast of iResearch, with the participation of the blockchain, the scale of the supply chain financial market is expected to increase to 6.1 trillion yuan in 2023, which will increase 3.6 trillion yuan compared to the traditional supply chain financial market, a significant year-on-year growth rate. Blockchain has the characteristics of immutable data and traceability, which is the key to solving the pain points of supply chain finance.

As a trusted decentralized data ledger, the blockchain has technical features such as historical data that cannot be tampered with and can be traced. It is very suitable for multi-party participation scenarios to increase mutual trust between participants. In particular, the alliance blockchain has the characteristics of friendly supervision and meeting the needs of internal pain points of market groups. The alliance chain is implemented in a low-key and pragmatic manner, and can quickly cooperate with governments and traditional institutions. Introducing blockchain technology into supply chain finance, realizing the storage and on-chain of data and information, further strengthening the security and immutability of information, and ultimately achieving mutual trust between supply chain financial institutions. Compared with traditional supply chain finance, its main advantages are: 1) maximizing the integration of four flows, 2) improving financing efficiency, 3) solving the financing difficulties of other suppliers, 4) reducing default issues, and so on. Based on the real trade background of the supply chain, the technical characteristics of the blockchain make the upstream and downstream parties in the supply chain actively "up".

Finance has become the largest industry in blockchain spending. Industry companies continue to promote the application of blockchain in the supply chain financial services field, opening up new space for industry development. The application potential of blockchain in various industries has begun to show. According to the "Global Semi-annual Blockchain Expenditure Guide" (2018) released by IDC, the scale of China's blockchain market in 2018 was USD 160 million, an increase of 108% over 2017. The market expenditure is expected to reach 1.67 billion US dollars in 2022, with a compound growth rate of 83.9% in 2017-2022. Among them, the financial industry is the largest industry invested in blockchain, and industry companies are actively exploring the application of blockchain in various scenarios.

Taking the blockchain as the basic platform and combining the Internet of Things, AIoT and other technologies to solve the credibility of the entire trade process is the general direction of the industry's development. In July this year, the CBRC issued the Guiding Opinions of the General Office of the China Banking and Insurance Regulatory Commission on Promoting the Real Economy of Supply Chain Financial Services to the major banks and insurance companies, suggesting that banks and insurance institutions be encouraged to incorporate new technologies such as the Internet of Things and blockchain. Embedded trading links. The combination of blockchain and AIoT technology, online and offline linkage is the general direction of industry development.

Investment suggestion: Based on the above analysis, we recommend that financial institutions and related companies that focus on blockchain finance include:

Subjects of supply chain financial services: EasyShare, Zheshang Bank, Financial One Account (OCFT);

Digital bills, digital assets related subjects: Donggang shares, Guangdian Express, Hailian Jinhui;

System service providers: Geer Software, Digital Certification, Gao Weida, Advanced Digital Communications.

Risk Warning: The business model of the blockchain has fallen short of expectations; the development of blockchain technology has fallen short of expectations.

1 core point
1.1 Core Recommendations Logic Blockchain + Supply Chain Finance Opens New Market Space : Blockchain has the characteristics of data that cannot be tampered with and can be traced back, which is the key to solving the pain points of supply chain finance-Blockchain does not only solve information After the supply chain finance business is put on the chain, it can solve the problem of mutual trust between enterprises (especially small and medium-sized enterprises) and financial institutions, greatly expanding the business space of supply chain finance and upgrading the industry model. This is the core pain point of the supply chain financial market, and it is also the key point to solve the financing difficulties of SMEs. Blockchain has opened up a new model for the supply chain finance industry and opened up new market space. 1.2 Our view is different from the market

The market underestimates the changes that blockchain has brought to the supply chain financial market. The market generally believes that the blockchain is only a new ICT technology, and it ignores the key role of the blockchain in the supply chain financial market-the blockchain does not only solve the problem of informationization, the blockchain has data that cannot be tampered with. And traceability. After the supply chain finance business is put on the chain, it can solve the problem of mutual trust between enterprises (especially small and medium-sized enterprises) and financial institutions. This is the core pain point of the supply chain financial market and it also solves the financing of small and medium-sized enterprises. The difficult point.

The market underestimates the barriers to the implementation of blockchain in the supply chain financial scene. The application of blockchain in the field of supply chain finance is currently in a rapid development stage. Large application logic does not mean that it can quickly land in business scenarios. Enterprises' concerns about data security and privacy, and the deep binding of online data and offline physical trade Aspects are the key issues encountered in the application. Blockchain alone is not enough. It must deeply integrate technologies such as AIoT to solve problems such as data privacy and online and offline deep binding, in order to quickly advance the application of blockchain in financial scenarios. Only companies that have accumulated advantages and experience in technology and business scene docking can build industry barriers.

2Blockchain solves the pain points of the scene and opens up the supply chain financial market space
2.1 The policy actively promotes the application of blockchain, and the supply chain finance industry is expected to gain new opportunities. The policy drives supply chain finance, and Internet finance is deployed to the B-side, which deeply connects to the financing needs of SMEs. Since 2016, relevant departments have successively introduced a number of policies to promote supply chain finance, which are intended to solve problems such as financing difficulties and expensive financing for SMEs, speed up capital turnover of SMEs and reduce financing costs. In October 2018, the Ministry of Finance issued the "Notice on the Issuance of the 2018 Inclusive Financial Development Special Fund Budget", and allocated 10 billion inclusive financial development special funds for 2018, an increase of 2.3 billion yuan and an increase of 29.85% over 2017. The determination to foster inclusive finance is evident. In recent years, with the tightening of consumer business supervision, many commercial banks and P2P companies have shifted from C-side finance to B-side layout. Supply chain finance will usher in rapid development to meet the financing needs of SMEs.
The size of the supply chain financial market has steadily increased. According to iResearch data, the supply chain financial market will grow by 5.3% year-on-year to 2.1 trillion yuan in 2019, and is expected to further increase to 2.5 trillion yuan in 2023.
The application scenarios of supply chain finance are widespread in various industries, and the application space is broad. Supply chain finance can provide more flexible and simple loan services for small and micro enterprises, and the industry involves wholesale and retail, commodities, medicine, agriculture, rural areas, and automobiles.
The Politburo collectively studied, the Cyberspace Office released the record, and the National Standards Commission followed up. The application of blockchain in various industries has entered the fast track. On October 24, 2019, the Political Bureau of the Central Committee of the Communist Party of China conducted the eighteenth collective study on the development status and trends of blockchain technology. General Secretary Xi Jinping emphasized when hosting the study that the integrated application of blockchain technology plays an important role in new technological innovation and industrial transformation; we must take blockchain as an important breakthrough in independent innovation of core technologies and accelerate the promotion of blockchain Technology and industry innovation and development. Especially in the financial scene, the General Secretary emphasized the need to use blockchain to solve problems such as difficulty in financing small and medium-sized enterprises, bank risk control, and department supervision. Earlier, in February of the same year, the "Regulations on the Management of Blockchain Information Services" issued by the State Internet Information Office (Internet Information Office) officially came into effect. The promulgation of "Management Regulations" also meant the "supervision era" for blockchain information services in China Officially coming. On March 30 of the same year, the Internet Information Office released the first batch of 197 domestic blockchain information service names and filing numbers, involving multiple industries and multiple listed companies. On October 18, the Internet Information Office released the second batch of 309 domestic blockchain information service names and filing numbers. To a certain extent, the implementation of a filing system for blockchain information services and the release of two batches of filing numbers within a short period of time itself represents the recognition and importance of blockchain technology by Chinese government regulators and the development of the blockchain industry is expected to accelerate. On November 20 of the same year, the official website of the National Standardization Administration announced that the National Standardization Commission had established a number of national professional standardization technical committees to accelerate the construction of standardized technical organizations such as blockchain technology. Following the eighteenth collective learning on blockchain technology organized by the Political Bureau of the CPC Central Committee on October 24, local governments have responded to the central government's call to incorporate blockchain technology into urban development planning or support the development of the blockchain industry. Policy documents were released intensively. On August 26, 2019, the China Internet Finance Association's Blockchain Research Working Group held a seminar on blockchain application practice and standardization in the field of supply chain finance. The Mutual Gold Association leads the application research of blockchain, and promotes the application of blockchain + supply chain finance. In this meeting, the participants analyzed the advantages of blockchain technology, such as information is difficult to tamper with, and can be traced back.It can effectively solve the pain points of the supply chain financial part of the business. Financial services can have a positive impact. After this meeting, the Association will soon launch blockchain security compliance applications in the field of supply chain finance, combining cloud computing, the Internet of Things and other digital technologies. The Internet Finance Association will take the lead and actively promote the application practice and standardization construction of system construction, cross-chain collaboration, information storage, risk prevention and control, and security assurance in the "blockchain + supply chain finance" field. The Internet Finance Association is a national-level Internet financial industry self-regulatory organization established by the People's Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission. It was formally established on December 31, 2015. Its purpose is to promote the healthy development of Internet finance. With the rapid development of the blockchain industry, the mutual gold association will continue to promote the application research of the blockchain industry, and promote the accelerated integration and healthy development of the blockchain and the real economy industry.
2.2 The alliance chain meets the pain points of the supply chain SMEs' financing difficulties. The core pain point of traditional supply chain finance that enterprises actively “on the chain” is mutual trust between financial institutions and enterprises. Due to the need for capital to circulate between the supply chains of enterprises, the security and credibility of information flows between enterprises are very problematic. In addition, new methods such as inventory financing and advance payment financing encouraged by supply chain finance are difficult to achieve due to the high degree of risk control. In particular, the difficulty of loans for small, medium and micro enterprises has not been completely solved. Enhancing the credibility of SMEs, especially the credibility of business data and bills, is the key to solving financing difficulties.
Blockchain has the characteristics of immutable data and traceability, which is the key to solving the pain points of supply chain finance. As a trusted decentralized data ledger, the blockchain has technical features such as historical data that cannot be tampered with and can be traced. It is very suitable for multi-party participation scenarios to increase mutual trust between participants. In particular, the alliance blockchain has the characteristics of friendly supervision and meeting the needs of internal pain points of market groups. The alliance chain is implemented in a low-key and pragmatic manner, and can quickly cooperate with governments and traditional institutions. Introducing blockchain technology into supply chain finance, realizing the storage and on-chain of data and information, further strengthening the security and immutability of information, and ultimately achieving mutual trust between supply chain financial institutions. Compared with traditional supply chain finance, its advantages are mainly: 1) maximizing the integration of four streams, 2) improving financing efficiency, 3) solving the financing difficulties of other suppliers, 4) reducing default issues, and so on.
Based on the “ 2018 China Blockchain Industry White Paper '' by the Ministry of Industry and Information Technology, the case of four supply chain financial platforms including Tencent Blockchain, EasyShare, Financial One Account, and Zheshang Bank was analyzed.Based on the real trade background of the supply chain, the district The technical characteristics of the blockchain make the upstream and downstream parties in the supply chain actively "up".
Blockchain brings market size increase and penetration. The blockchain + supply chain financial solution enables core companies to transfer credit at multiple levels, enhance the ability to monitor goods and the ability to grant credit risk, greatly reduce the threshold for corporate loans, and further increase the market penetration of supply chain finance. According to the forecast of iResearch, with the participation of the blockchain, the scale of the supply chain financial market is expected to increase to 6.1 trillion yuan in 2023, which will increase 3.6 trillion yuan compared to the traditional supply chain financial market, a significant year-on-year growth rate.
Blockchain reduces the cost and efficiency of supply chain finance and further increases the scale of profits. Blockchain solutions can reduce operating costs such as customer acquisition and data acquisition, which in turn reduces operating costs and increases profit scale. According to iResearch data, blockchain will help reduce the financial chain's cost of supply chain operations by 0.2% and increase profit by 599 million yuan. It is expected that by 2023, the profit increase will reach 29.665 billion yuan, and operating costs will be reduced by 0.6%.
Based on the alliance blockchain platform, it can effectively solve the pain points of SMEs in the supply chain industry such as difficulty in financing and high trust costs. The supply chain finance business centering on core enterprise credit transfer is an emerging and large-scale stock market. According to the data from the Prospective Industry Research Institute, the size of China's supply chain financial market was 13 trillion yuan in 2017, and it is expected to increase to 15 trillion yuan in 2020. Supply chain finance can inject funds for upstream suppliers, improve the operational efficiency and overall competitiveness of the supply chain, and is of great significance for activating the operation of the supply chain. The financing model of supply chain finance mainly includes accounts receivable financing, confirmed warehouse financing and financing warehouse financing. There are two major pain points in the traditional supply chain financial business model: the 1 + N circulation of core corporate credit and the verification of the authenticity of the trade background. Blockchain technology can realize the credit penetration of the supply chain financial system and solve the problems of difficult and expensive financing for secondary supplier distributors. Blockchain plays two roles in it, first is the core company's right confirmation process, including the verification and confirmation of the true validity of the entire bill; second is to prove the true validity of the credit certificate circulation, to ensure that the credit certificate itself cannot be faked, and to achieve credit opening , And then solve the credit financing dilemma of secondary suppliers. In this trusted ecosystem, the core company's credit (bills, credit lines or payables) can be converted into digital warrants, and smart contracts can be used to prevent performance risks, so that credit can be effectively transmitted along the supply chain, reducing cooperation costs and improving Performance efficiency. More importantly, when digital warrants can be anchored on the chain, the smart contract can also be used to split and circulate the funds of upstream and downstream enterprises, which greatly increases the speed of funds and solves the financing difficulties of SMEs. 2. The problem of expensive financing. In the context of real trade in the supply chain, supply chain trading companies and financial institutions are actively "on the chain". Based on the “ 2018 China Blockchain Industry White Paper '' by the Ministry of Industry and Information Technology, the case of four supply chain financial platforms including Tencent Blockchain, EasyShare, Financial One Account, and Zheshang Bank was analyzed.Based on the real trade background of the supply chain, the district The technical characteristics of the blockchain make the upstream and downstream parties in the supply chain actively "up". The “Easy Blocks” supply chain financial application system developed by Easy Seen based on blockchain technology was launched in April 2017. The system is based on the “core enterprise +, controllable goods +, and dynamic asset ABS +” scenarios. The service involves Manufacturing, pharmaceuticals, logistics, bulk, aviation, real estate, and more than ten industries and more than ten financial institutions. The micro-enterprise chain was jointly established by Tencent and factoring company Lian Yirong. Based on the underlying technology of Tencent's blockchain TrustSQL and Tenpay, the "Micro-enterprise chain" ABS project in May 2019 won the Shenzhen Stock Exchange without objection letter and was approved for 100 100 million yuan. Traditional financial institutions also attach great importance to the application of blockchain to supply chain finance, pawn financing and other fields. On October 11, 2019, CCB released the "BCTrade2.0 Blockchain Trade Finance Platform". Since its launch in April 2018, the cumulative transaction volume has exceeded 360 billion yuan. It has deployed domestic letters of credit, forfaiting, international factoring, re-factoring and other functions. It has three types of banks, non-bank institutions, and trading companies. Customers provide trade financial services based on the blockchain platform. Participants include 54 domestic and overseas branches of the Construction Bank and more than 40 peers. Beginning in 2018, Bank of China has started more than a dozen blockchain pilot projects to expand investment in a range of fintech tools, which will exceed the Bank of China's annual operating budget by 1%. In December 2019, Bank of China launched the first domestic bond issuance system based on blockchain technology, which was successfully applied to the issuance of special financial bonds of 20 billion small and micro enterprises by the Bank of China. As of October 2019, the second batch of filing lists was announced, and Zheshang Bank is the bank with the most recorded blockchain information services in China. The receivables chain platform adopts the "blockchain + supply chain finance" model, which is specially used to handle the issuance, acceptance, confirmation, payment, pledge, and payment of receivables, and record the transaction processing of the status of receivables The system and technology platform has a considerable transaction scale as of November 2019, and the system service fee is waived. As of June 30, 2019, Zheshang Bank had landed 1,848 receivables chain platforms, and the confirmed balance of blockchain receivables chain was 72.270 billion yuan.

The supply chain financial market is vast and more flexible and inclusive than traditional finance. Supply chain finance uses core enterprises as the support point, while providing them with financing and other settlement services, and putting credit funds into core enterprises and their upstream and downstream enterprises to provide financing for enterprises in the entire supply chain. The biggest advantage is that it can reach small, medium and micro enterprises, and the use of funds is more flexible and secure.

3 Case Sharing: Deep Plowing Scenarios, Industry Exploring Blockchain Supply Chain Finance Application Direction
3.1 Blockchain promotes the upgrade of the supply chain financial service model, and solves the pain points of the scenario. Finance has become the number one industry for blockchain spending. There are still many landing problems in the application of blockchain in financial scenarios. The privacy of data is the most concerned and companies need to cultivate it The landing of the scene promotes the upgrade of the blockchain financial service model. The application potential of blockchain in various industries has begun to show. According to the "Global Semi-annual Blockchain Expenditure Guide" (2018) released by IDC, the scale of China's blockchain market in 2018 was USD 160 million, an increase of 108% over 2017 The market expenditure is expected to reach 1.67 billion US dollars in 2022, with a compound growth rate of 83.9% in 2017-2022. Among them, the financial industry is the largest industry invested by the blockchain, which is related to the financial attributes of the blockchain ledger. The characteristics of the blockchain in terms of data tamper resistance and traceability make the blockchain a good sharing platform between participating nodes and solve the problem of mutual trust-but it also brings data privacy issues, especially in the supply In chain finance, if the operating data chain of supply chain companies is shared, the concerns in this regard are even more obvious. Therefore, how to break through the pain points of demand in the scenario and promote the implementation of blockchain supply chain finance has become the direction actively explored by industry companies.
Yi Jian shares continue to promote the construction of "Easy Blocks", trusted data pools and trusted warehouse platforms, promote the application of blockchain in the supply chain financial service field, and lead the industry development. In 2017, the company launched the "Easy Blocks" platform, which is the first domestic blockchain technology application platform to be implemented in the supply chain financial management and supply chain financial service scenarios. It supports online factoring, supply chain trade management, and assets. Securitization and other businesses. After three years of continuous accumulation, it is easy to see that the blockchain platform has achieved remarkable results in promoting the implementation of blockchain in the supply chain financial scene. In November 2019, Easyshare officially released EasyShare 3.0 and two trusted blockchain-based blockchain-based models at the "Trusted Supply Chain Fintech Innovation Seminar" in Beijing And IoT technology new products, and shared supply chain trade management and supply chain financial solutions and industrial practical experience based on these two products. As of February 21, 2020, the "Easy Blocks" supply chain platform has completed more than 201,000 credible transactions with a transaction value of more than 25.43 billion yuan, on-chain financing contracts of 431 points, and a financing amount of more than 5.82 billion yuan. Through the "Easy Blocks" online system, real-time recording and characterization of the real trading background of both parties to the transaction. Based on the supplier's huge and real trading background, upstream and downstream companies urgently need a technology platform such as blockchain to solve industry pain points It is clear that companies are actively embracing blockchain. The company entered the first batch of online information office blockchain record filing lists, and was on the 2019 list of top 100 Chinese blockchain companies. The "Regulations on the Management of Blockchain Information Services" were formally implemented on February 15, 2019. On March 30, the National Internet Information Office officially released the first batch of 197 domestic blockchain information service filing numbers, and the company was selected into the first batch of filing lists. On December 28 of the same year, the second session of the China Blockchain Industry Economy Annual Conference 2019, with the theme "Foreseeing 2020: A Key Year for Blockchain," announced the list of the top 100 Chinese blockchain companies in 2019, and the company was successfully selected.
Tencent Micro-enterprise Chain provides credit certificate transaction circulation services to open up digital asset financial services. Tencent's micro-enterprise chain platform is a supply chain financial service platform created by the cooperation between Tencent and Lianyi Rong, using Tencent's blockchain technology. The nodes on the micro-enterprise chain are composed of participating companies and financial institutions in the supply chain. The blockchain records the entire process of asset on-chain, circulation, splitting and redemption based on the core company's accounts payable-data from the blockchain The characteristics of immutability and traceability are the key to resolve the mutual trust of the participants. When the supplier registers the original assets for the on-chain, the micro-enterprise chain platform checks and verifies the corresponding receivables to ensure that the trade relationship is real and effective, and the on-chain assets are authentic and credible; using multi-party records of the blockchain , Non-tampering, non-repudiation, and traceability. The micro-enterprise chain platform records the process of splitting and transferring accounts receivable through the blockchain, and can trace back to the initial assets registered on the chain, enabling core companies to multi-level them. The credit penetration of suppliers reduces the financing cost of small and micro enterprises and revitalizes financial resources. From a technical point of view, the micro-enterprise chain is mainly characterized by asset gateways, intermediate accounts, UTXO models, independent fund clearing nodes, and convenient operations.
Zheshang Bank builds a receivable face and provides diversified value-added services. Zheshang Bank focuses on corporate liquidity management and the realization of "self-finance" requirements, and builds a distinctive corporate banking business centered on a pooled financing platform, an easy corporate banking platform, and a receivable chain platform. The receivables chain platform adopts the "blockchain + supply chain finance" model. It is an innovative and specially developed application for receivables, acceptance, confirmation, payment, pledge, Redemption and other services, transaction processing systems and technology platforms that record the status of receivables. Through blockchain technology, the company's precipitated receivables are converted into secure and convenient electronic payment settlement and financing tools to achieve transaction circulation and revitalize the originally poorly receivable accounts assets. Member units, upstream and downstream enterprises, etc. have expanded innovative financing channels to help companies reduce external financing and reduce financing costs, and promoted enterprises to build a "self-finance" ecosystem in the supply chain. Payment companies issue blockchain receivables to suppliers on the platform. Banks can act as credit enhancement agencies to confirm within the credit line. After receiving the blockchain receivables, the supplier can make external payments and transfer cash. Or apply for pool pledge financing, which will help alleviate the difficulty of financing for enterprises, especially small and medium-sized enterprises. For enterprises, the application of the account chain has the following advantages: 1) Revitalize accounts receivable: convert the company's accounts receivable into electronic payment settlement and financing tools, which can be paid or financed at any time; 2) reduce cash Outflow: Enterprises use blockchain receivables for external payment settlement;

3) Increasing financial income: companies can use temporary funds to buy and sell receivables issued by themselves to obtain discounted income and interest spreads during the holding period;

4) Reduction of debt ratio: By reducing the payment of accounts receivable, the company can settle payments externally, which can reduce the formation of new liabilities and reduce the debt ratio.

The receivables chain platform already has a considerable transaction scale and is exempt from system service fees. According to Xinhuanet.com, as of November 26, 2019, the bank's receivables chain platform of Zheshang Bank has accumulated a total of 164.7 billion yuan in receivables for 2113 enterprises. The pooled financing platform, the Easy Enterprise Bank platform and the receivables chain platform, as innovative and comprehensive financial service platforms of Zheshang Bank, are an effective means for Zheshang Bank to provide diversified value-added services to customers, meet customer needs, and increase customer stickiness , Currently free of related system service fees. Zheshang Bank started researching blockchain technology in 2016, pioneering multiple experimental scenarios in the financial field, and firstly applied it in the industry; in 2017, it created the industry's first receivables chain platform; in 2018, it successively developed warehouse receipts. Application scenarios of financial industry based on receivables chain platform such as, ordering, etc. It has also successively built the "Caiyiyun" personal financial transaction platform and inter-bank asset transaction platform, etc., to achieve the full coverage of blockchain technology in corporate business, retail business and financial market business.

3.2 Blockchain alone is not enough "ground gas", and it is necessary to actively combine AIoT to solve the demand in depth scenarios

Blockchain is enough to ensure that the data is credible, but there are still two major pain points in supply chain finance. The data on the blockchain is tamper-resistant. Through the analysis of historical data, trade traceability and data credibility are all guaranteed. However, this does not solve all problems-in actual implementation, there are two core pain points: 1) the "on-chain" of corporate data, which forms a trust-proof and traceable data for financial institutions, but there must be data in the enterprise Concerns about privacy, whether it is the core company or the supplier, the core data is put on the chain, forming a data chain that cannot be tampered with and traceable to the financier, and the company will inevitably worry that the data will be exposed to external risks; 2) in the supply chain In trade, the data on the chain is indeed credible, but whether the physical trade and goods circulation under the chain are real constitutes the "last mile" pain point in the supply chain. Blockchain alone is not enough ground gas. To change the financial business model of the supply chain, the blockchain also needs to be more "ground gas".

Taking the blockchain as the basic platform and combining the Internet of Things, AIoT and other technologies to solve the credibility of the entire trade process is the general direction of the industry's development. In July this year, the CBRC issued the Guiding Opinions of the General Office of the China Banking and Insurance Regulatory Commission on Promoting the Real Economy of Supply Chain Financial Services to the major banks and insurance companies, suggesting that banks and insurance institutions be encouraged to incorporate new technologies such as the Internet of Things and blockchain. Embedded trading links. The combination of blockchain and AIoT technology, online and offline linkage is the general direction of industry development. It is easy to see that the blockchain technology is fully integrated with the warehouse receipt pledge financing scenario, and combined with technical capabilities such as smart warehousing, smart IoT, artificial intelligence, and big data analysis, it effectively solves the real-time tracking, risk management and control and efficiency of traditional warehouse receipt pledge financing. Inferior issues. As a tamper-resistant and traceable database ledger, the blockchain can ensure the authenticity of the data chain; however, online and offline integration alone cannot be solved independently by blockchain technology. By combining with the Internet of Things, AI and other technologies, complete deep binding online and offline, making goods circulation, data chain, and credit transfer transparent, further promoting the convenience of supply chain financing and improving efficiency.
EasyShare has released two new products based on blockchain and IoT technology, namely "trusted data pool" and "trusted warehouse", to explore and solve the pain points of data privacy and online and offline binding scenarios. As early as 2016, Yi Jian Co., Ltd., one of the first domestic supply chain finance application companies in regional blockchain technology, cooperated with IBM China Research Institute to develop a blockchain technology-based supply chain financial platform-"Easy "Block", and went online for the first time in April 2017. As of the end of October 2019, the platform services cover more than ten industries such as manufacturing, pharmaceuticals, logistics, bulk, aviation, real estate and so on. On November 16, 2019, EasyShare officially released two models based on the blockchain and the Internet of Things, the "Trusted Data Pool" and "Trusted Warehouse" at the "Trusted Supply Chain Fintech Innovation Seminar" held in Beijing. New products of technology, and shared supply chain trade management and supply chain financial solutions based on these two products, and industry practical experience. According to the information of the press conference and the company's official website, the trusted data pool and trusted warehouse respectively solve the following pain points: ① "Trusted data pool" solves the pain points of data security on the chain: transparent, authentic, and traceable transaction data for financial institutions that are generally concerned about As well as data security issues that the company cares about, the company has developed a "trusted data pool" product. The "trusted data pool" has the following characteristics: first, the data is safe and controllable, the enterprise owns the data ownership, and the business partners can access the data after the data access authorization is obtained, and the data operation behavior is completely recorded; the second is that the shared data is consistent in real time and based on the area Blockchain consensus mechanism, enterprises and their business partners jointly maintain a shared ledger; third, data sharing network self-management, unique "partner function" supports enterprises to independently establish and manage business groups according to business development, and within the group Data sharing is done point-to-point. We can understand this way, corporate data is still circulating within the corporate network. How can the trade data pool formed by recording the data chain through the blockchain be credible? The interaction between the financial institution's financing chain and the enterprise's trusted trade data chain allows the trade data chain to be audited under authorized circumstances to retrospectively check the history of data entry to ensure data security and controllability and tamper resistance. In the application of the "trusted data pool" in the field of supply chain finance, the company's own data security and controllable pain points are solved through the core enterprise trade chain. Financial institution financing chains use the blockchain to ensure data tamper resistance and traceability, and promote small and medium-sized supply Commercial financing is convenient to optimize the supply chain credit transfer. As of November 2019, the company's trusted trade volume in the company's trusted data pool has reached more than 15 billion yuan.

② "Trusted Warehouse" solves the pain points of warehouse supervision in movable property financing:

Aiming at the concerns of financial institutions during the financing of movable assets, such issues as invisible movable assets, difficult supervision, unclear ownership, and repeated pledges, the company developed a "trusted warehouse" product, which deeply integrates the Internet of Things, artificial intelligence and blockchain technology. In warehouse supervision. The product intelligently upgrades and transforms the warehouse to form a set of trusted warehouse management systems that support financial institutions to achieve remote real-time inventory checking, outbound and inbound control, etc., and realize one-to-one correspondence between warehouse receipts and goods. To put it simply, China's warehouse cargo management is still at a relatively early stage. The complexity and diversity of goods have brought many loopholes to warehouse management. Being able to supervise the warehouse in real-time and ensuring that "water is not leaking" is the core requirement of financial institutions. The "trusted warehouse" digitizes the physical assets in the warehouse, so that transactions and circulation of physical assets are completed in the form of digital assets, which is an indispensable infrastructure for commodities entering the digital age. "Kexin Warehouse" is not just a smart warehouse management system, but a set of solutions to the core pain points of financial institutions' movable property financing. In practical applications, it is difficult for traditional single-technical means to be “not leaky.” With the use of blockchain, AI and other technologies, the authenticity of warehouse goods is fully guaranteed, and the problem of goods supervision during the financing of movable assets by financial institutions is solved. Further promote the effectiveness of supply chain finance. In May 2019, the "Trusted Warehouse" experimental warehouse completed the phased research and development and launched the pilot. At the "Digital Yunnan" Blockchain International Forum in July 2019, Yi Jian Co., Ltd., Yunnan Agricultural Reclamation Group, and Agricultural Development Yunnan Branch Signed a comprehensive cooperation agreement, and will build a "Yunnan agricultural supply chain management service platform" around trusted warehouses, agricultural product transactions, and financial services.

4 Investment advice
Based on the above analysis, we suggest that we focus on financial institutions and related companies that are deploying blockchain finance, including: supply chain financial services targets: Yi Jian Shares, Zhejiang Commercial Bank, Financial One Account Express (OCFT); digital notes and digital assets related targets: Donggang Stock, Guangdian Express, Hailian Jinhui;

System service providers: Geer Software, Digital Certification, Gao Weida, Advanced Digital Communications.

risk warning
The business model of the blockchain fell short of expectations; the development of blockchain technology fell short of expectations.

This article is an excerpt from the report "Guosheng Blockchain | Solving Core Pain Points, Blockchain Opens Up New Space for Supply Chain Finance", which was published by Guosheng Securities Research Institute on February 29, 2020. For details, please refer to the relevant report.