Leading Chinese fintech firm – Lufax Holding Limited – has filed for a US initial public offering (IPO) with the US Securities and Exchange Commission.
The filing took place on Wednesday and set a placeholder value of $100m. However, Lufax failed to provide any time frame or reveal how much the firm intends to raise in the IPO or the New York Stock Exchange listing.
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The firm, whose net profits surpassed $1bn in the first half of 2020, intends to list its American depositary shares under LU.
The listing was initially set for 2017 but was postponed due to the tightening of regulations on the Chinese peer-to-peer sector. Now, Lufax’s decision coincides with a flurry of movement from the Trump administration to delist Chinese firms.
Subsequently, many Chinese firms have been retreating from the US market.
Valued at $39.4bn in a funding round in March 2019, Lufax is a leading technology-empowered personal financial services platform in China.
The firm hopes to “lead the evolution of China’s asset management industry; broaden customer outreach through hub-and-spoke partnerships with traditional financial institutions; invest in core data and technology; and expanding overseas”.
Lufax previously focused on the large unmet demand for personal lending among SMEs and the provision of bespoke wealth management solutions to China’s fast growing middle class and affluent population.
According to the filing, the firm is well placed to capture markets which are underserved by traditional financial institutions and online-only fintech platforms backed by internet companies. The former generally “lack the data and skills to fully address customer need” whilst the latter are “lacking the financial services capability to provide suitable products to investors”.
Initially a peer-to-peer lending platform, their total client assets generated through the online wealth platform reached RMB374.7bn ($53bn) as of 30th June 2020.
Goldman Sachs, Bank of America Securities, UBS, HSBC and China PA Securities are the lead underwriters on the deal.
