OneConnect, the financial technology arm of China’s largest insurance company, has picked the US over Hong Kong to launch its long-awaited initial public offering.
Bankers were estimating the company, which is also backed by SoftBank, could raise up to $2bn in a potential Hong Kong listing, according to a Financial Times report last year.
The Ping An Insurance affiliate listed its offering size as $100m, a figure described by one banker involved as a place holder amount that was likely to change. SoftBank led a funding round valuing OneConnect at $7.5bn last year, according to Ping An’s 2018 annual report.
Ping An declined to comment on the IPO. The offering is being led by Morgan Stanley, Goldman Sachs, JPMorgan and Ping An of China Securities.
The amount raised by Ping An Good Doctor in its Hong Kong IPO
A large financial conglomerate with a background in insurance, banking and trust businesses, Ping An has in the past few years launched dozens of start-ups focused on areas such as medical care, financial technology, online car sales and artificial intelligence.
SoftBank has invested in many of its businesses, including Ping An Good Doctor. The online healthcare start-up raised $1.1bn in its IPO in Hong Kong in May last year, but had largely traded below its issue price until last month.
OneConnect, another one of the conglomerate’s start-ups, began as an internal unit that developed fintech for the company. Now it has an outward facing business, for instance selling technology platforms to smaller banks and other services such as providing credit checks.
The company had an operating loss of $156m in the nine months ended September 30, the filing shows.
OneConnect said its customer base includes all of China’s big banks and nearly half of the country’s insurance groups, with 3,700 customers in total.
“Through our platform, in the nine months ended September 30, on a daily basis we facilitated over 135,000 anti-fraud checks, 4.2m credit risk assessments, and the processing of approximately 13,000 auto insurance claims,” it said.
OneConnect plans to use the proceeds to continue its international expansion, after establishing subsidiaries in Hong Kong, Singapore and Indonesia.
In Hong Kong, it is set to develop the Hong Kong Monetary Authority’s eTradeConnect platform, a large-scale interbank blockchain trade finance platform, which serves 13 big banks.
OneConnect will dedicate 1 per cent of its annual revenue to blockchain development, Ping An said in its annual report.
Despite trade tensions between the US and China, and a deepening tech war between the two economies, Chinese companies have continued to seek listings in New York.
At least nine Chinese companies filed for an IPO in October, including Canaan Creative, one of the world’s largest makers of bitcoin mining materials, dronemaker EHang Holdings and real estate marketplace FangDD.
But OneConnect’s US listing also comes as a number of big Chinese tech champions are choosing Hong Kong to list.
Alibaba this week filed with the Hong Kong exchange to raise up to $13.4bn in a secondary listing while ByteDance, which owns viral video app TikTok, is one of the world’s biggest unlisted start-ups and is considering a listing in the city next year.