Ping An’s fintech baby OneConnect is ready to go public

As fintech continues to boom, OneConnect has filed for its US IPO. But given how much it depends on Ping An for business it will be hard to shake off the image that it is still Ping An's baby.

OneConnect filed for an IPO in the US on Thursday, showing off the global ambitions of Chinese fintech companies.

The company didn’t specify whether the stock would list on the New York Stock Exchange or Nasdaq. It only said that it intends to issue ordinary shares in the form of American Depositary Shares, or ADSs.

Fintech companies have been enthusiastic about developing technology that can be applied worldwide, and aiming for a global business is one reason why OneConnect has filed for its IPO in the US. Everyone wants to be the asset-light technology provider to supply the world.

OneConnect is a technology-as-a-service startup incubated by Ping An Group. It offers risk control, mobile banking and other fintech solutions for corporates. In an interview with FinanceAsia last week, Jonathan Larsen, chief innovation officer of Ping An Group and CEO of Global Voyager Fund, shared some of his thoughts about how fintech companies should develop.

“Fintech companies want a scalable business,” Larsen said. “They want to develop a technology that can apply to various industries.”

Indeed, the payment and lending business, with which OneConnect originally started, can be scaled. Real-time payment systems in use around the world have increased 35% over the past year and nearly fourfold since 2014, according to a report from financial service firm FIS. And as Alipay and WeChat gradually open up to foreigners who don’t have a bank account in China, fintech companies are stretching their arms around the globe.

Founded in 2015, OneConnect more than doubled sales last year to Rmb1.4 billion ($199 million). The company, however, suffered a net loss of Rmb1.1 billion at the same time.

One thing that concerns investors is OneConnect’s heavy dependence on Ping An Group, which provides almost 40% of its business. OneConnect buys services from its parent too, which contributes more than 20% of the fintech company’s costs. Whether OneConnect can diversify its business remains to be seen.

Morgan Stanley, Goldman Sachs, JP Morgan and Ping An of China Securities will act as joint bookrunners.


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