TORONTO, ON / ACCESSWIRE / October 30, 2020 / Woori BMO Group has today commented on Chinese fintech giant Lufax Holding Ltd. as they raise $2.4 billion in a U.S. initial public offering which was priced at the top of its indicative range.
"Lufax sold 175 million American depositary shares at $13.50 apiece," commented Christian Harper, Director of EMEA Wealth Management at Woori BMO Group. "The amount raised makes the offering one of the biggest IPOs by a Chinese company in the U.S. this year," he added.
The business, controlled by China's largest insurer Ping An Insurance, marketed its American depositary shares at $11.50 to $13.50 apiece. Two ADS represents one regular share.
Originally launched as a peer-to-peer lending platform in 2011, Lufax has now evolved into a popular online wealth manager that facilitates loans from banks to retail borrowers, including small business owners.
According to researchers at Woori BMO Group, three years ago, Chinese authorities initiated a widespread crackdown on the unruly peer-to-peer industry, which forced Lufax to reinvent its business. In 2019, the company's assets under management fell by 6.1% due to "asset portfolio adjustment and restrictions on consumer finance products," Ping An said in February. Wealth management transaction volumes dropped by nearly 30%.
"In the six months to June, the company's net profits amounted to just over $1 billion, on a total income of $3.6 billion," commented Andrew Williams, Director of Institutional Equity at Woori BMO Group. "At $13.50 a share, Lufax has a valuation of $33 billion based on the outstanding shares listed in its prospectus," he added.
Lufax intends to use the IPO funds for investment in product development, sales and marketing initiatives, technology infrastructure, and acquisitions or investments, according to the company's prospectus.
Goldman Sachs, BofA Securities, UBS, HSBC and China PA Securities are the lead underwriters on the deal. Lufax shares are scheduled to begin trading Friday on the New York Stock Exchange under the ticker LU.
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Founded in 2007, Woori BMO Group is a full-service wealth management company providing both corporate institutions and private clients a tailored financial advisory service from its retail office in Toronto, Canada.
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