Lufax Holdings applied for listing in the US, or it may become the largest fintech IPO in US stocks, without disclosing the size of the offering

　　China-Singapore Jingwei Client, October 8th. Lufax Holdings, a subsidiary of Ping An of China, officially submitted a public offering document to the US Securities Regulatory Commission on Wednesday, intending to be listed on the New York Stock Exchange under the stock code "LU".

Goldman Sachs, Bank of America Securities, UBS Investment Bank, HSBC and Ping An Securities are the lead underwriters of Lufax's IPO.

　　It is worth mentioning that the target financing amount has not been disclosed in the prospectus.

According to the estimated scale of US$2 billion to US$3 billion in market rumors, Lufax Holdings may become the largest financial technology IPO in the US stock market so far.

　　Lufax Holdings financing is mainly used for: product development, sales and marketing activities; technology infrastructure construction, technology research and development; capital expenditures; technology investment or acquisition; global expansion, etc.

　　Lufax Holdings has two main businesses, namely retail credit and wealth management. The former is mainly based on "Ping An Inclusive" and is also the main source of profit for Lufax Holdings, while the latter is based on "Lufax".

According to the prospectus, in the first half of 2020, Lufax’s revenue was 25.7 billion yuan and net profit was 7.3 billion yuan. The compound growth rate of net profit from 2017 to 2019 reached nearly 50%; the balance of management loans was 519.4 billion yuan, and the scale of wealth management assets was 3747. 100 million yuan.

　　In terms of year, in 2017, 2018, 2019 and the first half of 2020, Lufax Holdings realized operating income of 27.8 billion yuan, 40.5 billion yuan, 47.8 billion yuan, and 25.7 billion yuan respectively; net profit was 6.027 billion yuan and 135.76 billion yuan. Billion yuan, 13.317 billion yuan and 7.272 billion yuan.

　　From the perspective of revenue structure, revenue based on technology platforms has become the main source of Lufax’s revenue, accounting for 87.7% in the first half of 2020. This part of revenue includes retail credit transaction promotion service fees and wealth management transaction service fees.

　　As of June 30, 2020, the number of users of the loan business of Lufax Holdings reached 13.4 million, of which 69% were small and micro enterprises with fewer than 30 employees and annual income of less than 5 million.

The average unsecured borrowing scale of borrowers is 146,500 yuan, and the average secured borrowing scale is 422,400 yuan.

　　In terms of asset quality, as of June 30, 2020, the overdue rate for unsecured loans over 30 days was 3.3%, and the overdue rate for mortgaged loans over 30 days was 1.4%, both higher than in 2019.

　　The prospectus mentioned that the main reason for the increase in the overdue rate was the impact of the epidemic, the tightening of loan standards, and the provision of more loans to some industries affected by the epidemic.

However, the single-quarter overdue rate in the second quarter of this year has dropped to the level of the same period last year and has not been continuously affected by the epidemic.

Credit performance in the third quarter has basically recovered from the impact of the new crown epidemic.

As of September 30, 2020, the overdue rate of general unsecured loans over 30 days has dropped to 2.5%, and the overdue rate of mortgaged loans over 30 days has dropped to 0.9%.

　　According to the prospectus, the company completed a total of USD 777 million in Series A financing in March 2015 and January 2016, and completed USD 924 million in Series B financing in January 2016. Investors include Bank of China Group, Guotai Junan Securities, Minsheng Bank, etc.

In November 2018 and December 2019, a total of US$1.411 billion in Series C financing was completed. Investors include Chunhua Capital, Qatar Investment Authority, SBI Holdings, JP Morgan Chase, UBS, Goldman Sachs and many other institutions.

　　In terms of shareholders, Ping An Group holds 42.3% of the company's shares, and TunKung Company Limited holds 42.7% of the company's shares.

　　In addition, the prospectus mentioned that the outbreak of the new crown pneumonia epidemic may have a significant adverse impact on the company's business.

“Because our customers may be less willing to borrow or invest in wealth management products, there is a negative impact. Due to the economic problems caused by the new crown pneumonia, borrowers may also have less willingness or ability to repay loans, which may affect credit quality. The operations of some of our business partners and service providers are also restricted and affected, which may have a negative impact on our business." Lufax said.

　　According to Reuters, Lufax had a market value of US$38 billion before its last fundraising in 2018.

Before Lufax's application for listing, another financial technology company supported by Ping An, OneConnect, was listed in the United States in December 2019 and raised US$312 million.

　　On July 22 this year, according to sources quoted by Reuters, Lufax, a subsidiary of Ping An Group, sought to list in the United States as early as this year.

Lufax has hired Bank of America, Goldman Sachs, HSBC, JPMorgan Chase and UBS to be responsible for the listing.

At that time, Lu Jin said that it would not comment on the rumors.

　　It is understood that since 2016, Lufax's listing time and listing location have been changed several times.

In Lufax's plan, the earliest is to complete the listing in the second half of 2016.

By the end of 2016, Lufax reported that it had officially launched the listing arrangement and planned to land on the Hong Kong Stock Exchange in 2017.

Since then, news of listing will be heard almost every year.

(Zhongxin Jingwei APP)