Another Chinese Fintech Firm Is Going Public at the Same Time as Ant Group

Two Chinese financial technology companies are going public at the same time, but their initial public offerings are looking pretty different.

Jack Ma’s behemoth Ant Group Co. is set to raise $34.5 billion in a record-breaking IPO in both Shanghai and Hong Kong this week. Demand has been so strong that the company will stop taking orders from institutional investors in Hong Kong a day earlier than planned.

Meanwhile Lufax Holding Ltd., a former peer-to-peer lending giant that has morphed into a provider of wealth management and retail lending services, is seeking as much as $2.36 billion in a U.S. IPO. The company, which is backed by Ping An Insurance Group Co. -- China’s largest insurer by market value -- is also stopping taking orders on Wednesday, a day earlier than planned, according to people familiar with the matter. Its books are multiple times oversubscribed, one of the people said, asking not to be identified as the information is private.

An external representative for Lufax declined to comment.

While demand for Lufax’s IPO is also strong, that is perhaps where the similarities end. The company is unlikely to get the valuation boost that Ant is expected to see. At the top of the price range, Lufax would be valued at almost $33 billion based on the outstanding shares mentioned in its prospectus. That’s lower than a valuation of $38 billion it received prior to the closing of its last funding round in 2018, according to a Reuters report at that time. In contrast, Ant is set to see its valuation balloon from the $150 billion in its last funding round to about $315 billion after the IPO.

The different fates likely stem from Lufax’s origins, as the company was once among China’s largest P2P lenders. Since its last funding, Chinese authorities launched a sweeping crackdown on the sector, forcing the company to transform its business. Its assets under management dropped by 6.1% in 2019 due to “asset portfolio adjustment and restrictions on consumer finance products,” Ping An said in February. Wealth management transaction volumes fell by almost 30%.

But with its shares set to start trading on Oct. 30, Lufax will at least avoid any U.S.-election turbulence on its debut. Ant is set to start trading in Hong Kong and Shanghai on Nov. 5, two days after the vote, an event that could spark volatility in global markets.

UPCOMING LISTINGS:

  • Ant Group
    • Hong Kong, Shanghai
    • Size $34.5b
    • H.K. books close Oct. 28, listing Nov. 5
    • Shanghai subscription on Oct. 29
    • Citi, JPMorgan, Morgan Stanley, CICC
  • GDS Holdings
    • Hong Kong stock exchange
    • Size $1.67b
    • Listing Nov. 2
    • JPMorgan, Bank of America, CICC, Haitong
  • JW (Cayman) Therapeutics
    • Hong Kong stock exchange
    • Size up to $300m
    • Pricing Oct. 28, listing Nov. 3
    • Goldman Sachs, UBS
  • Lufax Holding
    • NYSE
    • Size up to $2.36b
    • Pricing Oct. 29
    • Goldman Sachs, Bank of America, UBS, HSBC, China PA Securities
  • RemeGen
    • Hong Kong stock exchange
    • Size up to $515m
    • Pricing Nov. 2, trading Nov. 9
    • Morgan Stanley, Huatai International, JPMorgan
  • Jiayuan Services
    • Hong Kong stock exchange
    • Pre-marketing Oct. 21-28
    • Haitong, Guotai Junan
  • Sunac Services
    • Hong Kong stock exchange
    • Size about $1b
    • Pre-marketing from Oct. 27
    • HSBC, Morgan Stanley
  • Radiance Holdings
    • Hong Kong stock exchange
    • Size $333m
    • Listing Oct. 29
    • ABC International, CLSA, Haitong
  • KWG Living Group
    • Hong Kong stock exchange
    • Size $390m
    • Listing Oct. 30
    • ABC International, Huatai International
  • Shimao Services
    • Hong Kong stock exchange
    • Size $1.3b
    • Listing Oct. 30
    • CICC, Morgan Stanley
  • Nanofilm Technologies
    • Singapore stock exchange
    • Size $345m
    • Listing Oct. 30
    • Citi, CLSA, Credit Suisse

More ECM transactions we are following:

  • The pessimist’s guide to Jack Ma’s record-breaking Ant IPO
  • JPMorgan Chase & Co. has named Francesco Lavatelli head of equity capital markets for Asia Pacific, replacing Daniel Darahem who became senior country officer of Brazil, according to an internal memo obtained by Bloomberg News

See also:

  • Asia ECM Weekly Agenda
  • IPO data
  • U.S. ECM Watch
  • EU ECM Watch
  • To receive the ECM Watch in your inbox daily, click the “subscribe” button at the top of this article.

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