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Wang Han, reporter for the Economic Observer Network The dust settled!
On October 8 Beijing time, Lufax Holdings formally submitted a public offering document to the US Securities and Exchange Commission (SEC). According to IPO application materials, Lufax’s NYSE code is “LU” and it did not disclose the amount of the fundraiser. If the above market rumors about the $ 2 billion to $ 3 billion funding scale are true, Lufax may become the largest financial institution in the US stock market thus far. IPO Technology.
The underwriters for the Lufax IPO transaction “Stars Gathering” are Goldman Sachs (Asia), Bank of America Securities, UBS Securities, HSBC Securities (USA), Ping An Securities (Hong Kong) Company of China, Morgan Stanley, CLSA and Jefferies Group.
Lufax Holdings appears to be relatively low-key in recent years. Affected by the overall tightening of the online lending industry, the market expected Lufax’s equity business to be subject to greater impact, but according to the prospectus, Lufax’s performance is quite impressive.
In the first six months of 2020, Lufax’s revenue increased 9.5% year-on-year to 25,684 million yuan (3,635 million US dollars) compared to 23,446 million yuan in the same period last year; net profit was 7.272 billion yuan (1.029 billion US dollars).
Develop the wealth management market with a compound growth rate of 48% in net profit in the last three years.
The prospectus revealed that Lufax’s two main businesses, retail credit and wealth management, are operated by Ping An Pratt & Whitney and the Lufax platform (lu.com) respectively.
From 2017 to 2019, Lufax Holdings’ total revenue increased from 27.8 billion yuan to 47.8 billion yuan, a compound growth rate of 31%; net profit increased from 6 billion yuan to 13.3 billion yuan, a compound growth rate of 48%; the first half of 2020, Lufax Holdings has a total income of 25.7 billion yuan, a net profit of 7.3 billion yuan, and a net profit margin of 28.3%. In particular, Lufax’s technological empowerment is evident in the data. Lufax Holdings revenues based on technology platforms have increased from 61.9% in 2017 to 87.7% in the first half of 2020.
Based on the wealth management business provided by the Lufax platform, its platform users have an asset of 29,300 yuan per capita, and 75% of the platform’s asset scale is contributed by users with an investment scale of more than 300,000 yuan, that is, the middle class and wealthy people are its main customers. .
Lufax Holdings ranked second in retail credit balance of 519.4 billion yuan, and ranked third in wealth management with 374.2 billion yuan. With the share of the P2P equity business falling to 12.8%, Lufax Holdings maintained steady growth in user assets under management, with a compound growth rate of 39.4% from 2017 to 2019 and 34.2% in the first half of 2020.
As of September 30, 2020, Lufax Holdings’ total retail credit balance reached RMB 535.8 billion; the total amount of clients’ assets managed through the online wealth management platform reached RMB 378.3 billion. This means that the transformation of Lufax Holdings into the wealth management market has achieved results.
To subdivide the customer base, unlike Ant Group’s large-scale “Little White Financial Management”, nearly 75% of Lufax’s platform assets are contributed by clients with an investment of more than 300,000 yuan, and the User retention rate is 95%. . The per capita assets of wealth managers held by users amounted to RMB 29,300, more than three times higher than the average user assets of RMB 8,000 in non-traditional financial institutions.
Three Jinke companies meet in the capital market
In 2020, China’s fintech unanimous unanimously pressed the IPO button. Outsiders can’t help but pay more attention to the operating conditions and earnings models of Ant Group, JD Digital and Lufax Holdings. The income capabilities of the three companies have a lot to do with their market strategies.
Overall, in today’s market for non-traditional financial institutions, the comprehensive strength of financial technology companies Ant Group and Lufax Holdings will rank first and second respectively. Compared to the first two, JD’s strength lies in “technology” and its advantages are reflected throughout the entire financial industry chain.
The journalist found that all three companies are in a fast-growing stage, with an average compound growth rate of more than 30%. There is still a gap between the overall income of Lufax Holdings and Ant, but it has a multiple advantage with JD Digital.
In terms of net profit, the profitability of Lufax Holdings and Ant has shown an upward trend. In 2017, 2018, 2019 and January-June 2020, Lufax Holdings achieved net profits of 6.027 million yuan, 13.576 million yuan, 13.317 million yuan and 7.272 million yuan, respectively. The net profit margin increased from 21.7% in 2017 to 27.8% in 2019. During the same period, the ants were 8,205 million yuan, 2,156 million yuan, 18,070 million yuan and 21,923 million yuan, and the net profit margin increased from 12.55% in 2017 to 14.98% in 2019.
The retail credit business provided by Ping An Pratt & Whitney primarily caters to small and micro businesses, with a market share of up to 32% in the balance of small and micro business loans, and the loan amount is much higher than that of Prev. The average unsecured loan scale of its borrowers is 146,500 yuan, and the average scale of secured loans is 422,400 yuan.
According to industry-wide rankings from the “Hurun Global Unicorn List 2020” released in August this year, Ant Group topped the list with a market value of RMB 1 trillion (# 1 on fintech sub-list) , and Lufax had RMB. 270 billion yuan ranked fourth (second on the fintech sub-list), and JD Digits ranked 12 (fifth on the fintech sub-list) with 130 billion yuan.
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