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Ping An’s OneConnect launches US IPO

Reuters/ Hong Kong

Tuesday، 03 December 2019 10:08 PM

Ping An Insurance’s OneConnect Financial Technology launched a US initial public offering (IPO) of up to $504mn yesterday, reducing both its target offering size and valuation.
The unit of China’s biggest insurer by market value, Ping An Insurance Group Co of China Ltd, is selling 36mn American depositary shares (ADSs) at an indicative range of $12 to $14 a share, according to its updated prospectus with the US Securities and Exchange Commission.
The price range values OneConnect at between about $4.5bn and $5.5bn in its long-awaited public offering, said people with knowledge of the matter.
That is well below its $7.5bn valuation last year when it raised $750mn in its maiden funding round from investors including Japan’s SoftBank and Japanese financial firm SBI Group.
That potentially would make for a down round — a fall in valuation following a new investment — of a tech-related firm.
The float comes as tech investor SoftBank smarts from the abandoned share sale of major portfolio firm WeWork, as well as its first quarterly loss in 14 years dragged down by an $8.9bn hit at its giant Vision Fund, through which it invested in OneConnect.
Ping An and OneConnect declined to comment on the latter’s valuation.
The people declined to be identified as they were not authorised to speak to media.
OneConnect, which provides technology solutions to small and medium-sized financial institutions, was eyeing a valuation of about $8bn and an IPO of up to $1bn, sources told Reuters in June. It changed the listing venue to New York from Hong Kong a few months ago in the hope of achieving a higher valuation, Reuters reported, with massive anti-government protests in Hong Kong making markets jittery.
If a “greenshoe” or over-allotment option is fully exercised, the company could raise up to $580mn.
Each ADS represents three ordinary shares, the prospectus showed.
OneConnect had revenue of 1.55bn yuan ($218mn) in the first nine months of 2019, up 72% from the same period a year earlier, but losses widened to 1bn yuan from 579mn yuan, according to its prospectus.
OneConnect’s bookbuilding will run until December 12. It is due to begin trading on December 13 on the New York Exchange under the symbol “OCFT”. Goldman Sachs, JPMorgan and Morgan Stanley are among the main banks working on the IPO.

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