Escalating tensions between China and the US have failed to deter Shanghai-based fintech giant Lufax from pursuing a stateside initial public offering (IPO).
Lufax submitted its IPO application to list on the New York Stock Exchange (NYSE) under the code “LU” on 7 October, according to information from the US Securities and Exchange Commission (SEC).
Ping An-backed Lufax is one of China’s biggest fintech companies, and is ranked as the world’s fourth most valuable unicorn company (start-up worth over $1 billion) by the Hurun Report. It was valued at USD$39.4 billion in early 2019 following a fund-raising round for $1.4 billion.
The company was established in Shanghai in September 2011 as a P2P-lender, with registered capital of 837 million yuan. Its official website and online lending platform lu.com came online in March 2012, with the goal of “providing professional, reliable financial services to small and medium-enterprises and retail clients, and helping them to achieve convenient, high-efficiency, low cost financing and wealth gains.”
According to its prospectus Lufax posted revenues of 47.8 billion yuan in 2019, and net profits of 13.3 billion yuan. In the first half of 2020 the fintech company’s total revenues were 25.7 billion yuan, while its net profits were 7.3 billion yuan.
Sources said to the Wall Street Journal that Lufax hopes to raise $3 billion via its stateside IPO, and plans to list by the end of October in order to avoid the volatility created by the 2020 presidential election the following month. This could make it the biggest Chinese IPO in the US since Alibaba’s 2014 listing which netted $25 billion.
The IPO ambitions come amidst heightened tensions between China and the US during the COVID-19 pandemic, as well as multiple moves in America to stymie or halt the listing of Chinese companies.
These measures include the Trump administration mooting the requirement that Chinese companies abide by US GAAP requirements, and a tightening of NASDAQ requirements to prevent the listing of smaller Chinese firms.