Ping An Fintech Unit OneConnect Picks Banks For Up To $1b HK IPO

Ping An Insurance’s OneConnect financial technology unit has selected Goldman Sachs, JPMorgan and Morgan Stanley to work on its Hong Kong initial public offering (IPO) of up to $1 billion, people with direct knowledge of the matter said.

Ping An Insurance Group Co of China Ltd, China’s biggest insurer by market value, is keen to list its finance unit OneConnect as early as September, the people said, speaking on condition of anonymity.

OneConnect, which provides technology solutions to small and medium-sized financial institutions, could file with the Hong Kong stock exchange as soon as June, three of the people said.

The sources declined to be identified as they were not authorised to speak to media.

Ping An, JPMorgan, Goldman Sachs and Morgan Stanley declined to comment.

OneConnect would join another unit of Ping An – Ping An Good Doctor – in listing in Hong Kong.

Formally known as Ping An Healthcare and Technology Co Ltd, the healthcare platform operator raised $1.12 billion in May 2018. It has fallen 40.3 percent since going public.

OneConnect raised $750 million in its maiden funding round in 2018, valuing it at $7.5 billion. It counts Japan’s SoftBank and Japanese financial firm SBI Group as some of its main investors.

Two of the sources said the company was targeting a valuation of about $8 billion.

OneConnect met with investors at the end of last month to update them on its IPO plans, according to a person who attended the meeting. However, many investors were concerned that an IPO this year would not be able to get a strong valuation amid the current challenging market and falling valuations in China’s “unicorn” space, the person said.

Unicorns refer to startups with a value of least $1 billion.

OneConnect clocked revenue of 1.56 billion yuan ($226 million) in 2018, an increase of 168% year-on-year, according to a presentation given to investors and seen by Reuters.

Chinese technology companies have lost their appeal for investors the past year amid weak stock markets.

Many of Hong Kong’s big tech listings last year – such as smartphone maker Xiaomi and online services provider Meituan Dianping – are trading below their offer prices.

Ride-hailing apps Uber Technologies and Lyft this year have also had weak listings in the United States.

Reuters