The Chinese financial technology company Lufax, backed by Ping An Insurance Group, is seeking to secure around $3 billion in an initial public bid in the U.S., people with knowledge of the matter disclosed.
The fintech giant is considering a U.S. stock sale as early as this year after it recently evaluated a bid in Hong Kong, stated the sources, who requested anonymity as the information is confidential.
According to the sources, Goldman Sachs Group, Bank of America, and UBS Group AG are among major lenders assisting with the share sale process of the Shanghai-based company. Initial work on the transaction was also undertaken by HSBC Holdings Plc and JPMorgan Chase & Co., the sources said.
The proposed listing comes at a time when trade frictions between Beijing and Washington remain high, as the Trump administration continues to call the coronavirus the "China virus." Yet even after the Luckin Coffee debacle, American investors have been bullish on some recent IPOs. Lufax was worth $38 billion prior to its latest fundraising in 2018, Reuters reported at the time.
Chinese companies have raised around $48 billion this year, which is roughly half the global amount, based on figures from Refinitiv, through listings and secondary offerings. Agora Inc., an operating system module provider, and Kingsoft Cloud Holdings, a cloud infrastructure company, went public in June and May, respectively, and have seen their stocks grow more than 200 percent from their IPO rates. The two companies have secured a consolidated $860 million in their listing debuts.
Some Chinese fintech groups nevertheless have found it more convenient to list in the United States than in Hong Kong, where the process involves satisfying the exchange's Listing Committee of their qualification, a step not required in the U.S. The listing panel has previously denied firms whose business models it had suspicions over. Digital currency miner producers Ebang and Canaan, for instance, went on to list in New York after being rejected by the exchange committee in Hong Kong.
Lufax is building on its long-held ambitions to go public in the U.S. as a big number of its investors and creditors are based in New York, the sources said. Lufax, which focuses on providing lending services to small and medium-size businesses and individuals, will follow in the footsteps of OneConnect Financial Technology, which secured around $312 million in its New York Stock Exchange debut in December. Both OneConnect and Lufax are backed by Ping An Insurance Group, China's biggest insurer.
