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Investors’ Appetites For IPOs Extends Well Beyond American Companies

On Wednesday Lufax, the online wealth manager controlled by Ping An Insurance Group, China's largest insurer, filed to go public on the NYSE. Lufax operates as both a wealth manager and facilitates loans from banks to retail borrowers. As of June, its wealth-management clients held $53 billion of assets, and individuals had $73.5 billion of loans outstanding. In its latest private round, it was valued at $39.4 billion. Lufax’s IPO is expected by the end of October and it will use the ticker symbol “LU”. The lead underwriters are GS, BofA Securities, UBS Investment Bank, HSBC and China PA.

Lufax joins two other leading Chinese fintech companies which are planning on raising billions by issuing shares in public markets. Ant Group, controlled by Alibaba’s (BABA) founder Jack Ma, is seeking $35 Billion from a dual listing in the exchanges of Hong Kong and Shanghai. Moreover, the fintech affiliate of online stores JD (JD), JD Digits is aiming at bringing in $2.9 Billion from a listing in Shanghai's STAR Market.

According to data from Dealogic, Year-To-Date (YTD) 26 Chinese companies have sold shares worth $9bn in Wall Street IPOs, compared with just $3.5bn across 25 deals in 2019. Lufax’s upcoming IPO happens at a time of high political uncertainty in the U.S, escalated political tensions between US-China and Trump’s administration desire to delist US-listed Chinese companies unless they comply with domestic regulatory standards. It will be interesting to see whether this trend of Chinese firms preferring the U.S. markets will continue or if the potential regulatory scrutiny will force them to tap into local markets.


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