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Chinese Wealth Management Company Lufax Files for IPO in U.S.

On Wednesday, Chinese fintech giant Lufax filed for an Initial Public Offering (IPO) in the U.S. According to the company’s filing, it is planning to list its American depositary shares on the New York Stock Exchange under the symbol “LU”.

The size of the offering is not yet known but a placeholder amount is set at $100 million.

Lufax said:

“We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our ordinary shares, after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement.”

As for the use of the money raised, Lufax will use the proceeds for general corporate purposes. They include investment in product development, sales and marketing activities, technology infrastructure, capital expenditures, global expansions, and more. Besides, Lufax may also consider an acquisition of smaller companies that complement its business.

Lufax IPO comes at a time when the U.S.-China tensions are intensifying. Now many Chinese companies are looking to reconsider their listings on US exchanges. As Lufax has warned, “a severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.”

Lufax explained:

“There is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China.”

Founded in 2011 as a P2P platform by Ping An, Lufax is the second-largest peer-to-peer lender in China. The platform matches borrowers with investors, collecting a 4% fee on each loan. Lufax takes advantage of the latest big data and IT technologies. It leverages the most advanced risk assessment models and risks control systems. Since the start of the business, Lufax has arranged over 200,000 peer-to-peer loans that worth a total of $2.5 billion.

Before its latest fundraising in 2018, Lufax was valued at $38 billion. The company has over 50 funding and credit enhancement partners. Among its investors are Goldman Sachs, UBS, CDH Investments, CICC, UOB Venture, Arbor Ventures, SBI Group, JPMorgan Chase & Co., BlackPine Private Equity Partners, COFCO, Guotai Junan Securities, China Minsheng Bank.

This year, for the six months ended June 30, Lufax posted a net profit of 7.27 billion yuan ($1.07 billion). In comparison, last year, the profit totaled 7.48 billion yuan.

Chinese Wealth Management Company Lufax Files for IPO in U.S.

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