Following approval from the Grand Court of the Cayman Islands for its privatization plan, OneConnect Financial Technology Co., Ltd. (OCFT), once hailed as the "first fintech stock" under Ping An Insurance Group, has officially begun its delisting process.
According to recent announcements, OCFT, which was dual-listed on the New York Stock Exchange (NYSE) and the Hong Kong Stock Exchange (HKEX), had its HKEX listing status withdrawn on November 21. The permanent suspension of its American Depositary Shares (ADS) on the NYSE also took effect on the same day, with the final delisting procedures set for completion by December 1.
This marks just six years since OCFT's NYSE debut in December 2019 and a little over three years since its HKEX listing in July 2022.
Regarding post-privatization strategic plans, OCFT stated that, as the privatization process is still ongoing (with the final delisting pending), disclosures will adhere to regulatory requirements and official announcements on the relevant exchange and SEC websites. The company will communicate future developments and strategies as appropriate after privatization.
**Privatization Plan Approved with Maximum Consideration of HKD 1.69 Billion** OCFT, incubated by Ping An Group, positions itself as a commercial technology service provider for financial institutions, offering digital banking solutions, digital insurance solutions, and digital infrastructure.
The privatization bid was led by its controlling shareholder, Platinum Fortune Limited (Platinum Fortune), a subsidiary of Ping An. Prior to privatization, Platinum Fortune held approximately 353 million shares, or 30.18% of OCFT’s issued share capital. Through subsidiaries (including Platinum Fortune), Ping An Group held about 376 million shares, or 32.12%. Post-privatization, Ping An’s ownership will rise to 100%.
The offer price was set at HKD 2.068 per share (equivalent to approximately USD 7.98 per ADS), representing a 23.10% premium over the last trading day’s closing price on HKEX (HKD 1.680) and a 117.91% premium over the 180-day average closing price (HKD 0.949). For ADS, the premium was 20.61% over the NYSE closing price (USD 6.610) and 118.65% over the 180-day average (USD 3.646). The maximum cash consideration required was approximately HKD 1.689 billion, to be funded via internal resources and/or financing.
On October 28, Platinum Fortune’s privatization proposal was approved at a shareholder meeting. On November 14 (Cayman Islands time), the Grand Court sanctioned the plan and confirmed the capital reduction resulting from share cancellations.
**Why Delist After Just Six Years?** OCFT debuted on the NYSE in December 2019 as a pioneering fintech stock and later achieved dual-primary listing on HKEX in 2022. However, by March this year, privatization plans were unveiled, with Ping An engaging Morgan Stanley as a financial advisor as early as January to explore the move.
Analysts note that privatizations in Hong Kong’s market are increasingly common, driven by undervalued stocks, low liquidity, and high compliance costs. For OCFT, the triggers included a plummeting ADS price (down over 95% since 2019) due to structural illiquidity, waning investor interest, and scant analyst coverage. HKEX trading volumes were also persistently low post-2022 listing, further deterring market participation.
Financially, OCFT’s reliance on Ping An for revenue remained a critical weakness despite efforts to boost third-party income. Challenges included reduced IT budgets among key clients, fierce competition, and discontinued services by some Ping An affiliates, leading to deteriorating performance. Revenue from core operations fell 36.16% in FY2023–2024, widening losses. Its final earnings report before delisting showed a 43.4% year-on-year decline in operating revenue, with net losses in 2023 and H1 2024—contrary to earlier break-even projections for 2024.
OCFT reiterated its commitment to integrating financial expertise with advanced technology, focusing on deepening client relationships, optimizing products, and expanding overseas. Platinum Fortune pledged additional funding and deeper integration with Ping An’s ecosystem post-privatization to mitigate operational risks as a private entity.
Comments