Fintech firm One Connect plans to raise $468 million in downsized IPO

On Dec 3, 2019

Ping An’s fintech arm One Connect Financial Technology said on Monday that it is aiming to raise $468 million in its US listing, a significant markdown from the previously reported $1 billion target.

Why it matters: One Connect is eyeing a valuation well below last year’s $7.5 billion in what may potentially be a “down round,” or a decrease in valuation following a new investment, considered rare among technology firms, according to media reports.

Details: The Shenzhen-based One Connect plans to offer 36 million American depositary shares (ADS) at a price range of $12 to $14 for a total of $4.9 billion at the midpoint of the range, according to Renaissance Capital.

The firm plans to list on the New York Stock Exchange under the ticker symbol “OCFT.”
Goldman Sachs, JP Morgan, and Morgan Stanley are among the eight main banks underwriting the deal.
The long-awaited initial public offering (IPO) is expected to be priced on Dec. 12. The company’s IPO has been in the works since the start of the year.
One Connect did not immediately respond to TechNode’s request for comment.

Context: One Connect focuses on providing financial technology solutions to small – Only Infotechmid-sized financial institutions. It is an instrumental part of Ping An’s ongoing efforts to transform into a technology-driven company. The company in recent years has become one of the largest commercial blockchain platform operators.

According to the company’s amended filing to the US Securities and Exchange Commission (SEC), One Connect’s losses for 2019 widened to more than RMB 1 billion for the first nine months of this year from RMB 579 million in 2018.
One Connect had previously planned to raise $1 billion in Hong Kong at a valuation of about $8 billion. It changed the listing destination to New York from Hong Kong in June, hoping to achieve a higher valuation. New York, considered home to more mature markets, was a more attractive choice amid the trade tensions between China and the US and the months-long protests in Hong Kong.