Lufax files for an estimated $3b US IPO despite stricter scrutiny

DM Monitoring

BEIJING: Lufax Holding Ltd, a Chinese peer-to-peer lender and one of the country’s largest online wealth management platforms, filed to list its shares in the U.S. on Wednesday, becoming the latest company looking to take advantage of a rebound in capital markets despite stricter scrutiny on Chinese firms. Lufax, backed by financial giant Ping An Insurance Group, did not disclose the size of its offering but set a placeholder amount of $100 million. It is said to become the largest fetch IPO in the U.S. this year, according to the previously rumored volume of $2 billion to $3 billion. The Shanghai-based company is looking to list its American depositary shares on the New York Stock Exchange under the symbol “LU,” Lufax said in a filing here. Goldman Sachs, BofA Securities, UBS Investment Bank, HSBC and China PA Securities are the lead underwriters to the company’s offering.
The company’s filing revealed that funds will be mainly used to beef up technology through infrastructure construction, research and development, investment or acquisitions.
Set up in 2011 as a peer-to-peer platform by Ping An, the company now operates in China’s retail credit and wealth management industries. According to Oliver Wyman, Lufax’s two businesses ranked second and third in China respectively. The company posted a net profit of $1.07 billion for the first six months, with nearly 88 percent earned from its technology platform. As of June 30, its outstanding balance of retail credit facilitate stood at $76 billion, and total client assets generated through its online wealth management platform reached $55 billion, according to the filing. Lufax’s New York listing comes against the backdrop of a number of Chinese companies looking to reconsider their listings on U.S. exchanges amid rising U.S.-China tensions. “Tensions between the U.S. and China have escalated due to… trade disputes, the COVID-19 outbreak, sanctions imposed by the U.S. Department of Treasury on certain officials of the Hong Kong Special Administrative Region and the central government of the PRC and the executive orders issued by U.S. President Donald J. Trump in August 2020 that prohibit certain transactions with certain Chinese companies and their applications,” Lufax detailed in its filing.