Blockchain Arm of Chinese Insurance Giant Ping An Files for $500 Million U.S. IPO on NYSE
OneConnect, a Chinese company that has been the blockchain arm of insurance company Ping An, filing for a $500 million U.S. IPO on New York Stock Exchange (NYSE) the next Friday.
The company priced its offering of 36 million shares of American Depository Share (ADS) at $12 to $14 a share. Based on this upper limit, the maximum amount of capital raised by OneConnect is about $500 million.
Morgan Stanley, Goldman Sachs, JPMorgan Chase and Ping An Securities (Hong Kong) will act as the joint lead underwriters of this offering, and enjoy up to 5.4 million shares of ADS over-allotment option.
The prospectus shows that OneConnect is a commercial technology cloud service platform for financial institutions. It mainly provides business application and technical support for financial institutions by integrating professional financial knowledge and technologies to help their customers realize digitalization, thus achieving the goal of reducing risks and improving efficiency.
Blockchain is one of the company’s four major business lines along with artificial intelligence, big data and cloud services that could use blockchain technologies, according to OneConnect’s website.
OneConnect now has successfully filed two blockchain services includes Cross-border Trade Platform in Tianjin Port and Oneconnect blockchain. It claims that its self-developed FiMAX blockchain technology can achieve 50,000 TPS (transactions per second) while maintaining a low latency of fewer than 0.05 seconds, by adopting its designed zero-knowledge proof algorithms.
By September 30, 2019, OneConnect owns more than 3700 institutional clients, and has covered all mainstream banks in China (including 6 state-owned banks and 12 joint-stock banks), 99% of urban commercial banks and 46% of insurance companies. Besides, it owns 2850 domestic patent applications, 542 foreign patent applications.
Since 2018, OneConnect has started its overseas business, with subsidiaries in Hong Kong, Singapore and Indonesia, including the eTradeConnect blockchain trade linkage platform for the Hong Kong Monetary Authority, which provides services for 13 mainstream banks.
In 2017 and 2018, the revenue of OneConnect was 582 million Chinese yuan and 1.413 billion Chinese yuan respectively, an increase of 142.9% year on year. By September 30, 2019, its revenue reaches 1.555 billion Chinese yuan, an increase of 72.2% over the same period of 2018. In addition, the net losses in the nine months before September 30, 2019 were 1049 million Chinese yuan.
After IPO, the shareholding ratio of Sen Rong limited, Ping An Group, SBI and their related benefits will be 45.1%, 35.9% and 5.5% respectively. The raised funds will be mainly used in four ways: one is to enhance the platform’s technical ability; the second is to expand overseas business and strategic investment; the third is to improve brand efficiency and marketing; the fourth is for general corporate purposes.