Chinese online lender Lufax Holding Ltd., which listed in Hong Kong without raising money, gained on its first trading day.
(Bloomberg) — Chinese online lender Lufax Holding Ltd., which listed in Hong Kong without raising money, gained on its first trading day.
Shares finished at HK$34.75 ($4.43) in the Asian financial hub after opening at HK$33.50. The latest Hong Kong price represents a 10% premium to the Thursday closing price of Lufax’s American depositary shares. Lufax has fallen about 85% in New York trading since its October 2020 debut.
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 elsewhere.
Lufax, which was once among China’s largest peer-to-peer lenders, was forced to diversify into more traditional businesses including wealth management and retail lending after the authorities launched a sweeping crackdown on the P2P sector.
Domestic regulatory clampdowns continue to weigh on China’s fintech sector. Companies have been shoring up capital and mulling business overhauls as watchdogs tighten rules spanning lending, banking partnerships and data privacy.
Lufax opted to list by way of introduction, a simpler mechanism than a traditional stock offering. 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.
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 Kong trading volume,” the note said.
(Updates with closing stock price)
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