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In my previous note, OneConnect Financial Pre-IPO - Prospects appear promising but previous valuation was demanding, I spoke about the company’s products, its past growth and the strong support that it receives from its parent.
In this note, I’ll run the deal through our ECM framework and talk about valuations. OC had been valued at US$7.4bn in 2018 and is now aiming to list at a market cap of around US$5bn. However, despite the cut in valuation, the extent of upside remains unclear.
OneConnect Financial IPO - Even the sizeable down round might not be enough
OneConnect Financial Technology (OC) plans to raise around US$500m in its US listing. OC is a part of Ping An group. It provides cloud-native technology applications and technology-enabled services to financial institutions. As of September 30, 2019, it had over 3,700 customers including all of China's major banks, 99% of its city commercial banks, and 46% of its insurance companies. OC has registered stupendous revenue growth over 2017-9M19, mostly driven by its rapid customer acquisition. The company plans to add more products to its product suite over 2019-20, while also expanding its operations beyond China to other Asian countries. OC was also one of the recipients of the virtual banking license in Hong Kong earlier this year.In my previous note, OneConnect Financial Pre-IPO - Prospects appear promising but previous valuation was demanding, I spoke about the company’s products, its past growth and the strong support that it receives from its parent.
In this note, I’ll run the deal through our ECM framework and talk about valuations. OC had been valued at US$7.4bn in 2018 and is now aiming to list at a market cap of around US$5bn. However, despite the cut in valuation, the extent of upside remains unclear.
Underlying
Ping An Insurance (Group) Company of China Ltd. Class H
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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