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Shares of SoftBank-backed OneConnect rise 5% in U.S. market debut

Published 12/13/2019, 10:59 AM
Updated 12/13/2019, 11:01 AM
Shares of SoftBank-backed OneConnect rise 5% in U.S. market debut
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(Reuters) - Shares of OneConnect Financial Technology jumped 5% in their U.S. market debut on Friday, valuing the Chinese cloud tech firm at $3.79 billion.

Shares opened at $10.51 compared with its IPO price of $10.

OneConnect, which focuses on small and medium-sized businesses, raised around $312 million on Thursday, selling 31.2 million American depositary shares (ADS).

The company had slashed its IPO size by 28% on Wednesday and lowered its target price range to $9 to $10 per share from $12 to $14 per share.

Analysts said investors would buy SoftBank's inflated private assets in the public market only when they were offered at a lower price.

In October, Softbank-backed infectious disease researcher Vir Biotechnology Inc (O:VIR) priced its IPO at the lower end of the target range.

OneConnect, a unit of China's biggest insurer by market value Ping An Insurance Group Co of China Ltd, counts Japan's SoftBank and SBI Group among its main investors.

The company generated sales of 1.55 billion yuan ($220.20 million) in the first nine months of 2019, up 72% from a year earlier. It's losses, however, widened to 1 billion yuan from 579 million yuan, according to the company's prospectus.

Reuters had earlier reported that OneConnect changed the listing venue to New York from Hong Kong a few months earlier, expecting a higher valuation, as massive anti-government protests in Hong Kong made markets jittery.

Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) were among key IPO underwriters.

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