Chinese blockchain unicorns Canaan, OneConnect file for US IPOs

2 min read
(Image credit: Bigstock/David Tran)

OneConnect, the fintech arm of Ping An Insurance, and crypto mining rig maker Canaan have each announced plans to list in the US, following a number of other Chinese tech firms in recent weeks seeking overseas capital.

Why it matters: The pair join the recent influx of Chinese companies filing applications for US listings, which could help boost the flagging US market.

  • Several promising startups were expected to go public in the US in 2019, but fundraising has been mixed and others scrapped or delayed plans.
  • Chinese firms such as OneConnect and Canaan are pressing ahead with plans for US public offerings despite ongoing trade tensions.

INSIGHTS | Politics aside, Chinese tech firms pile into US markets

Details: Both initial public offerings (IPOs), if successful, would be a long time in coming. Canaan planned to list in Hong Kong last year but let its application lapse partly due to a slumping cryptocurrency market, according to Reuters. OneConnect also considered going public in the special administrative region in February.

  • Ping An’s OneConnect, which is also backed by SoftBank’s Vision Fund, specified a placeholder amount of $100 million in a filing on Wednesday. Morgan Stanley, Goldman Sachs, JPMorgan Chase, and Ping An Securities Group are joint bookrunners on the deal.
  • OneConnect had previously planned to raise $1 billion in Hong Kong at a valuation of about $8 billion.
  • Hangzhou-based Canaan is planning to raise $100 million by listing at the end of the month, according to Renaissance Capital, down from its original $400 million offering plan in October.
  • The firm is planning a Nov. 20 debut on Nasdaq, with 10 million American depositary shares (ADS) offered at $9 to $11 per share. Canaan could potentially have a fully diluted market value of $1.6 billion and an enterprise value of $1.4 billion based on the midpoint of the proposed range.
  • China Renaissance, Citi Group, and CMB International Capital are joint bookrunners, while Credit Suisse will no longer act as primary underwriter.

Context: Both companies have reported losses this year.

  • For the first nine months of 2019, OneConnect booked a net loss of $147 million against revenue of $218 million. The company posted an $82 million net loss against earnings of $128 million for the same period in 2018.
  • Canaan also posted a loss of $45.8 million and net revenue of $42.1 million in the first six months of the year. In the first half of 2018, the company posted a profit of $25 million and net revenue of $275 million.