Lufax Holding, which runs an online wealth management and peer-to-peer lending platform, is planning an initial public offering in the US this year, according to a person familiar with the matter, amid heightened scrutiny on US-listed Chinese companies in recent months.
The company is pursuing its long-held ambitions to list in the US as many of its investors and creditors are based in New York, the person said, declining to be named becaused the information is private. Lufax will follow in the footsteps of OneConnect Financial Technology, which raised US$312 millionin its New York Stock Exchange debut in December.
Both Lufax and OneConnect are backed by Ping An Insurance (Group), China’s largest insurer.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
The decision to stick with a US listing bucked recent trend where Chinese companies, predominantly technology firms, have decamped and turned to Hong Kong and Shanghai for capital amid a regulatory backlash in the US. They were preceded by Semiconductor Manufacturing International Corp, China’s biggest chip maker, which ended its 15-year stay on the NYSE in May last year.
Founded in 2011, Lufax was valued at US$39.4 billion during its last-known funding round at the end of 2018. Its business is about breaking even, the person familiar said.
While it has previously contemplated a listing in Hong Kong in early 2018, the plan did not materialise for unknown reasons.
A US listing this time, however, is made easier because the company is registered in the Cayman Islands and it has a lower profile than many other Chinese internet giants. Lufax had 44 million registered users on its platform on December 31, while its rival Ant Group had about 900 million.
Earlier this year, Lufax completed a US$1.29 billion syndicated loan to help finance the firm’s restructuring and expansion, just before the coronavirus outbreak severely disrupted business and fundraising globally.
The group has also moved into non-performing loans, just as the asset class swells and prices slip as economies globally slow down or contract. The balance of Lufax’s loans have grown steadily, while only 1.9 per cent of its outstanding loans are more than 30 days overdue, people familiar said.
Lufax scaled down its peer-to-peer lending business last year after Beijing tightened its scrutiny on the sector following a string of scandals.
Purchase the 120+ page China Internet Report 2020 Pro Edition, brought to you by SCMP Research, and enjoy a 30% discount (original price US$400). The report includes deep-dive analysis, trends, and case studies on the 10 most important internet sectors. Now in its 3rd year, this go-to source for understanding China tech also comes with exclusive access to 6+ webinars with C-level executives, including Charles Li, CEO of HKEX, James Peng, CEO/founder of Pony.ai, and senior executives from Alibaba, Huawei, Kuaishou, Pinduoduo, and more. Offer valid until 31 August 2020. To purchase, please click here.
More from South China Morning Post:
- Why Jack Ma’s Ant Group chose a dual IPO in Hong Kong and Shanghai and not New York
- Ping An’s OneConnect Financial files for US$100 million New York IPO
- Nasdaq forms pact with Singapore Exchange to attract dual listings as Ant Group’s blockbuster IPO passes them by
- Hong Kong stock exchange to get new tech index tracking Alibaba, Tencent and 28 other peers
- SMIC shares soar in Shanghai, in a successful debut that may give more Chinese stocks confidence to leave US market
This article Lufax, P2P fintech backed by China’s biggest insurer, said to aim for IPO in the US this year first appeared on South China Morning Post