FAST NEWS: Lufax jumps after announcing plans for second listing in Hong Kong

The latest: Lufax Holding Ltd. (LU.US), the largest of China’s private online loan facilitators, announced Tuesday that it will be listed on the Hong Kong Stock Exchange on Friday “by way of introduction,” a method that involves no fundraising.

Looking up: Lufax’s new Hong Kong listing will have “dual-primary” status. That means the shares could eventually be available to Chinese mainland investors through a program linking the Hong Kong and mainland Chinese stock markets, thereby expanding the company’s investor base and trading volume.

Take Note: As the company is being listed by way of introduction, no new shares will be issued and no new funds will be raised to provide the company with new capital.

Digging Deeper: Lufax was listed in New York in October 2020 and is 41.4% owned by Ping An Insurance (2318.HK; 601318.SH). It uses a business model that sees it connect small and medium-sized businesses with institutional lenders, avoiding high credit risk for itself. The company’s revenue fell 22% year-on-year to 12.32 billion yuan ($1.79 billion) in last year’s fourth quarter, as it swung to an 806 million yuan loss during a Covid resurgence in China. However, its Chairman Cho Yongsuk said the company is confident of a U-shaped recovery in the coming quarters as China’s economy bounces back with the end of its “zero Covid” policy last December.

Market Reaction: Shares of Lufax jumped 11.9% in New York on Tuesday and were up another 1.5% to $2.10 in after-hours trading. But even after the gains, the stock still trades near the lower end of its 52-week range.

Translation by Jony Ho

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