Chinese online lender Lufax Holding Ltd. started trading in Hong Kong on Friday after a listing that did not raise proceeds.
(Bloomberg) — Chinese online lender Lufax Holding Ltd. started trading in Hong Kong on Friday after a listing that did not raise proceeds.
Shares traded as high as HK$36.50 ($4.65) in the Asian financial hub after opening at HK$33.50. That compares with a closing price of $2.01 in the US on Thursday. The American depositary receipts are down 85% since the debut stateside in October 2020.
The Ping An Insurance Group Co.-backed company is listing in Hong Kong to hedge against the risk of being banned from US markets. Lufax’s decision follows the delisting of a slew of state-owned companies, as well as moves by other Chinese tech giants to add secondary or primary listings in Hong Kong.
Domestic regulatory clampdowns continue to weigh on China’s fintech sector. Companies have been shoring up capital and mulling business overhauls as industry watchdogs tighten rules spanning lending, banking partnerships and data privacy.
Lufax opted to list closer to home by way of introduction, a simpler mechanism than a traditional shares offering that does not involve raising fresh money. Other Chinese companies that chose the same method for the so-called homecoming listing include electric-vehicles maker Nio Inc. and Tencent Music Entertainment Group.
Lufax, which was once among China’s largest peer-to-peer lenders, was forced to diversify into more traditional offerings including wealth management and retail lending after Chinese authorities launched a sweeping crackdown on the P2P sector.
The listing “could pave the way for the firm to draw more mainland Chinese investors,” Bloomberg Intelligence analysts Francis Chan and Peter Lau wrote in a note this week. “Yet Lufax’s downbeat 2023 profit outlook and valuation recovery — at odds with fundamentals — might affect its Hong Hong trading volume,” the note said.
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