Ping An’s OneConnect Flat in Debut After $312 Million IPO

(Bloomberg) -- China-based cloud fintech platform OneConnect Financial Technology Co. ended its trading debut exactly where its $312 million U.S. initial public offering started.

OneConnect’s American depositary shares, which initially rose as much as 7.1%, closed at $10 Friday, unchanged from the offer price in its IPO Thursday. That gave the company a market value of $3.66 billion.

The company, one of several Ping An Insurance (Group) Co. businesses backed by SoftBank Group Corp., sold 31.2 million shares Thursday at the top of a revised target range of $9 to $10. That followed a back-and-forth move by the company this week to first shrink its IPO goal to $260 million from its earlier target of $504 million, and then increase the size of the share sale.

OneConnect opted for a New York listing despite U.S.-China tensions. The company earlier considered a Hong Kong listing with a target of raising about $1 billion at a valuation of about $8 billion, Bloomberg reported in February.

The IPO followed Thursday’s signing by President Donald Trump on a phase-one trade deal with China, averting a new wave of U.S. tariffs that were set for Dec. 15.

U.S. IPOs This Week

  • Brazilian brokerage XP Inc. raised $2.25 billion including greenshoe shares. It closed Friday up 40% from its IPO price on Tuesday.
  • Software company Bill.Com Holdings Inc. raised $249 million including greenshoe shares and has risen 77%.
  • Chicago-based software firm Sprout Social Inc. fell 2.4% in its debut Friday after raising $150 million.
  • Chinese autonomous aircraft maker EHang Holdings Ltd., which raised $40 million, is up 3.3%.

OneConnect, backed by SoftBank’s Vision Fund, provides technology solutions that help increase revenue and manage risks for small and midsize financial institutions in China.

SoftBank has placed bets on companies under the state-linked insurer Ping An, as part of its play in combining technology and insurance. Last year, Vision Fund invested in Ping An Good Doctor and Ping An Healthcare Technology.

“The sooner OneConnect can secure enough clients to transition to a subscription-based model from a transactional one, the faster the Ping An unit can establish a lead in Chinese fintech spending, which could reach $57 billion by 2023.”

-- Steven Lam, analyst, Bloomberg Intelligence

OneConnect had a net loss of $147 million on revenue of $218 million during the nine months ended Sept. 30, compared with an $82 million net loss on revenue of $128 million for the same period last year, its filings show. Since 2017, Ping An Group has extended to OneConnect more than $1 billion in loans with interest rates ranging from 4.55% to 7.3%.

The offering was led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Ping An Securities Group Holdings Ltd. OneConnect is trading on the New York Stock Exchange under the symbol OCFT.

©2019 Bloomberg L.P.

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