According to a Securities and Exchange Commission filing, one of China’s most prominent wealth management firms is filing for a U.S. IPO in hopes of landing on the New York Stock Exchange. Lufax wants to go public with its platform and plans to list its Shanghai firm under the ticker “LU.” The firm is backed by Ping An Group, a Chinese holding conglomerate that ranked number seven on the Forbes Global 2000 listing.
Technology startups in China have been looking for a way to position themselves in the stock markets and go public on Wall Street, even though political tensions have been high between China and the U.S. There’s been a rush of Chinese market activity this year.
Electric automakers Li Auto and Xpeng Motors went public in America earlier in the year. Meanwhile, Ant Group, the world’s most valuable Fintech and unicorn company, is gearing up for a concurrent IPO on the Shanghai STAR market and the Hong Kong Stock Exchange. The STAR market is likened to Nasdaq’s tech exchange. Ant Financial has a $150 billion valuation and is controlled by Jack Ma, Alibaba’s founder.
Lufax’s listing occurs as tensions between the U.S. and China rise and threatens American-listed Chinese companies. Washington lawmakers are advocating more scrutiny of Chinese firms by proposed legislation, which threatens some of those firms’ delisting.
Some Chinese companies listing in the U.S. have secondary listings in Hong Kong, including NetEase and Alibaba, because of the ongoing threats.
In an SEC filing, Lufax said that “a severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.”
The filing went on to refer to the uncertainty of China and U.S. relationships regarding treaties, trading, tariffs, and government regulations.
“Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic, economic, and political policies and the expected or perceived overall economic growth rate in China,” the filing noted.
Lufax posted a $1.03 billion net profit for the first half of the year. This was slightly less than last year’s earnings for the same period.
Bank of America Securities, Goldman Sachs, HSBC, UBS Investment Bank, and China PA Securities are the head underwriters for the planned IPO. Lufax hasn’t announced its price shares, nor has it said how many shares will be offered during its listing.