Industry insiders commented that this price is not ideal compared with the valuation level of round a financing of oneaccount. However, considering the current US stock market environment, especially in the context of the general decline in the value of the technology stock market, adopting a more conservative and prudent pricing strategy can better help oneconnect grasp the current listing time window and leave room for a more stable stock price performance after the opening. Some investment bankers believe that during the whole fundraising period, the IPO process will be directly started after the round a financing, which to a great extent protects the interests of the round a investors and prevents their shares from being diluted in the subsequent rounds B and C financing. Therefore, it is not excluded that the round a investors are willing to moderately accept the discount on pricing to ensure the maximization of their interests.
Financial one account is one of the unicorn enterprises incubated by Ping An in the financial sector. After listing, it will become the second exclusive animal enterprise of Ping An group after ping an good doctor, and also the first subsidiary listed in the matrix of Ping An Group in the United States.
Seize the commanding point of listing quickly
According to the data, one account for finance was registered and established in December 2015, which is a combination of three businesses of the original one account for Ping An financial technology, the Internet service cloud platform of Ping An technology and Qianhai credit investigation.
That is to say, from the establishment to the announcement of listing, one account financial only took four years.
Today, it is positioned as a financial technology service company of Ping An Group, which provides end-to-end solutions such as intelligent marketing, intelligent products, intelligent risk control, intelligent operation, etc. for banks, insurance, investment and other financial institutions in the whole industry. It is one of the unicorns of financial technology incubated by Ping An in China, and also version 3.0 of Ping An financial service ecosystem - open market and open market The practitioner of the field.
According to the prospectus, as of September 30, 2019, financeone has more than 3700 customers, covering 6 major state-owned banks and 12 national joint-stock banks in China, serving 618 banks and 84 insurance companies in total, covering 99% of urban commercial banks and 46% of insurance companies, reaching hundreds of millions of end users.
According to the prospectus, financeone completed round a financing in 2018. 12 investors purchased nearly 100 million shares of financeone common stock at a price of $7.50 per share, with a post investment valuation of $7.5 billion. In March this year, another investor invested an additional US $13.114 million to hold 1748500 shares of common stock of financeone account. Prior to this issuance, the total number of common shares issued by financeone is 1017 million. After the issuance, the number of ordinary shares will increase to 1112-1128 million.
Previously, foreign media reported that in order to obtain a higher valuation, the company changed its IPO plan in Hong Kong formulated at the beginning of this year and went to the United States for listing.
According to the analysis of the insiders, as a financial technology company, one account should be more in line with the taste of American stock investors. Meanwhile, the process of listing in the United States is relatively simple, and listing in the United States can expand the international influence of one account and even the whole China Ping An.
According to the process of listing in the United States, once the issue price is determined and investors receive the formal prospectus, the IPO can be declared effective and the listing transaction begins.
After the successful listing of financeone account, it will become the first TAAs (technology as a-service, business technology cloud service platform) enterprise in China to go to the United States for listing. At the same time, in the matrix of Ping An, it will become the second exclusive animal enterprise successfully listed after ping an good doctor, and also the first Ping An subsidiary listed in the United States.
The internal logic of one account in Finance
After the release of the prospectus of financeone, the company is still in a loss period, and the high proportion of Ping An Group and internal enterprises in the income structure of financeone has been questioned by the outside world.
However, some analysts said that according to the financial report data of one account in recent three years, although Ping An group plays an important role in the total revenue, the proportion of revenue from third parties is increasing. The proportion of revenue from Ping An Group and lufax has declined from 70.6% in 2017 to 55.5% in the first three quarters of 2019. This means that the third-party market is gradually becoming the main contributor of profits. To understand the internal logic of financial one account, a financial technology company established less than 4 years ago, we need to take into account the industry pain and opportunity behind it as well as the companys own barriers in the industry.
According to the above analysts, the background of the rapid development of financeone is the urgent need of global financial institutions for digital transformation. In China, financial institutions not only face the subversion from external Internet companies, but also need to cope with the pressure of business restructuring brought about by economic transformation. Therefore, the demand of digital transformation is particularly urgent.
According to Ovi consulting, the total expenditure of Chinese financial institutions in the field of science and technology in 2018 is 152.2 billion yuan, which will grow at a compound annual growth rate of 21.4%, and reach 400.8 billion yuan in 2023. In contrast, most financial institutions are unable to independently support the digital transformation and the scarcity of corresponding talents.
Analysts said that the development of financeone account is strategically accurate to the financial Internet trend of the financial industry, so the business of financeone account fits the trend of financial digitalization and Internet finance. After the listing of financial all in one account, it plays a very important role in Ping Ans financial technology strategy and building a financial digital ecosystem.
According to the prospectus, financeone account provides customers with more than 50 cloud native products, which can be deployed through modularization, respond to customers needs quickly, and combine products into solutions to meet client-to-end needs. It provides 12 solutions covering multiple vertical fields of banking, insurance, investment and other financial service industries, as well as full process services, as well as full system underlying technical services from data management, intelligent operation and cloud platform.
At the same time, financeone account is responsible for the scientific and technological exploration of Ping An Group blockchain. In its 2018 annual report, Ping An said that it has built the worlds largest commercial blockchain platform through oneaccount, providing services to more than 200 banks, 200000 enterprises, 500 governments and other commercial institutions at home and abroad, and has more than 44000 blockchain nodes. Therefore, there are also market participants who call financial one account as the real blockchain first share.
In addition, in recent years, financeone is also actively seeking opportunities in overseas markets. At present, financeone has carried out business in 10 countries and regions, including Hong Kong, Singapore, Thailand, Indonesia, Cambodia and South Korea. It is worth noting that its wholly-owned subsidiary has successfully obtained a virtual banking license in Hong Kong.
Before the stage of profit contribution, the income is growing rapidly
It is understood that Ping An has divided the growth of financial technology unicorn enterprises into four stages, including the establishment of platform, traffic and data accumulation, explosive income growth and profit contribution. And Ping Ans positioning for the development stage of financial one account is far from the stage of profit contribution. At present, Ping An Groups positioning for financial one account is still between the second and third stages.
For the loss, one account financial explained in the prospectus that the business is still in the early stage of development, and has incurred and will continue to generate a lot of costs to develop solutions and commercialize them, so as to promote the future business. Chen Xinying, the joint chief executive of Ping An, once said, 50% of the cost of financial one account is on new products, and if we dont make new products, we can make profits immediately.. But oneconnect will continue to develop and invest in innovative products.
In this context, although one account has not yet entered the profit period, it has begun to show a high-speed growth trend.
According to the prospectus, the revenue of financial one account increased by 143% from 580 million yuan (US $0.8 billion) in 2017 to 1.41 billion yuan (US $0.2 billion) in 2018. By September 30, 2019, revenue was 1.55 billion yuan ($210 million).
The number of customers has also soared. According to the report of Aowei consulting, financial one account has become the platform with the largest number of customers in Chinas financial institutions oriented TAAs enterprises. Market participants believe that, on the basis of the internal logic of business model, although a considerable part of its current revenue depends on Ping An Group, the support of Ping An Group in turn is its unique advantage.
When ye Wangchun, chairman and CEO of oneconnect, talked about the comparative advantages of the company and other financial technology companies, he said that the differentiated competitive advantage of oneconnect lies in the integration gene of financial technology and financial business. Compared with internet financial technology companies, the most difficult thing to do financial technology is the integration of financial technology and financial business. Ping An Group is a powerful comprehensive financial institution, which has advantages in this respect.
Source: First Financial Editor: Guo Chenqi, nbj9931