Ping An Insurance-backed fintech unicorn Lufax files for US stock offering
- Lufax plans to seek a listing on the New York Stock Exchange amid fraying US-China relations
- Company did not disclose the size of the offering in its regulatory filing but sources have put it at US$2 billion to US$3 billion
Lufax did not disclose the size of its offering, using a common place holder figure of US$100 million in its filing with the US Securities and Exchange Commission. But sources have said the IPO could raise between US$2 billion and US$3 billion.
In Thursday’s filing, Lufax showed it had a net profit of 7.2 billion yuan (US$1.03 billion) for the six months to June 30. It reported a net profit of 7.5 billion yuan a year earlier.
The company said it plans to use the proceeds from the offering for general corporate purposes, including product development, sales and marketing activities and improving its technology infrastructure.
The company stopped facilitating new peer-to-peer loans in August last year. As of June 30, outstanding peer-to-peer loans as a percentage of total client assets had declined to 12.8 per cent.
Goldman Sachs, BofA Securities, UBS, HSBC and China PA Securities (Hong Kong) are serving as lead underwriters on the offering.
At the same time, a number of high-profile US listed Chinese firms, including JD.com, NetEase and mainland KFC operator Yum China, sought secondary listings in Hong Kong this year or engaged in take-private deals as tensions rose between Washington and Beijing this year.
Chinese firms flood US markets for capital ahead of moves to tighten regulations, and before presidential election
The listing by Lufax has come after the New York Stock Exchange (NYSE) raising US$20.65 billion in IPOs for the first nine months this year across 28 deals, with the amount raised down 6 per cent from a year ago, according to data from Refinitiv. The NYSE still ranked behind Nasdaq, which raised US$31.94 billion across 111 deals for the period.
Bankers and IPO advisers said the various measures by the US to restrict Chinese companies’ access to its capital market have led to some prospective Chinese issuers to think harder and longer when they assess the pros and cons of a US listing.
But the more diverse spectrum of institutional investor base in the US has remained attractive to some Chinese tech companies, who might view that they could fetch a fairer valuation through a listing in the US, rather than in Hong Kong or China.
