FAST NEWS: OneConnect Cashes Out of Non-core Business
The latest: Financial technology service provider OneConnect Financial Technology Co. Ltd. (OCFT.US; 6638.HK) on Thursday said it sold its 40% stake in Puhui Lixin to Puhui Management, a company principally engaged in the investment and disposal of non-performing assets.
Looking up: At the end of September, OneConnect had cash and cash equivalents of 1.46 billion yuan ($204 million). Through this transaction the company will obtain an additional 199 million yuan, further increasing its cash reserves.
Take Note: Upon completion of the sale, OneConnect will no longer be able to incorporate gains associated with Puhui Lixin, which are expected to total 26.84 million yuan this year.
Digging Deeper: Founded in 2015, OneConnect is an associate of financial giant Ping An Group that provides “technology + business” solutions to financial institutions. The company was spun off from Ping An and listed on the New York Stock Exchange in 2019, and later listed in Hong Kong in July this year, making it the first business technology service provider to return to Hong Kong with a dual primary listing. The company said the sale of non-core assets like Puhui Lixin will help it to further concentrate on its core technology business and better utilize its financial resources.
Market Reaction: OneConnect’s Hong Kong-listed shares were flat on Monday, closing unchanged at HK$1.71 at the midday break. The stock is down 79.2% from its opening price of HK$5.30 on its first day of trading in Hong Kong earlier this year.
Translation by Jony Ho
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