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Short Sellers Target Ping An Fintech Unit After Ant IPO Halt
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The headwinds that toppled Ant Group Co.’s initial public offering now threaten a $22 billion dream of China’s Ping An Insurance (Group) Co. -- to pivot from a finance group to a tech giant and be valued like one.To get more latest ant group news, you can visit shine news official website.
While Ping An’s Lufax Holding Ltd., which offers wealth management and retail lending services, was able to complete its U.S. IPO days before new Chinese rules torpedoed Ant’s $35 billion sale, the stock has given up early gains and is now a target for short sellers. Renewed threats by U.S. regulators to delist Chinese stocks also threaten Ping An’s plans to take more of its in-house startups public.
Ant’s IPO suspension “fundamentally changed near-term investment appetite” for Chinese fintech stocks, with Lufax as “the community’s No. 1 consensus short,” according to a Nov. 5 report from Procensus, which polled 84 global investors managing $15.3 trillion. Short interest represented about 34% of Lufax shares outstanding as of Nov. 17, up from just 5% when the Ant deal was pulled, according to data compiled by IHS Markit. Ping An owns about 39% of Lufax after the IPO.
China’s tightening grip on fintech firms and an antitrust crackdown complicate Ping An’s bid to lift its valuation closer to those garnered by tech giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. The Shenzhen-based finance firm, which gets three-quarters of its revenue from insurance, trades at about 10 times 2019 earnings; Alibaba’s ratio is six times higher.
Ping An has pledged to plow more than $22 billion into research from big data to blockchain to make it more “tech” than “fin,” while carving out some of its units through public listings to maximize value.The finance group has developed at least 10 startups in recent years after using technology to improve its traditional insurance and banking services. The units, including publicly traded health-care portal Ping An Healthcare & Technology Co. and fintech provider OneConnect Financial Technology Co., are aligned in five groups targeting finance, health, real estate, autos and urban life.
China’s move to place lending limits and boost capital requirements on fintech firms presents headwinds for the tech units, which also face threats in the U.S. The Securities and Exchange Commission intends to propose a regulation this year that would lead to the delisting of companies for not complying with U.S. auditing rules, people familiar with the matter have said.
Lufax plunged 23% on the Bloomberg News report Tuesday, paring gains to 8% since its IPO last month. OneConnect fell 3.1%, though it has still doubled this year. Ping An Healthcare was little changed last week in Hong Kong and has gained 78% in 2020.