Chinese Fintech Company Lufax seeks to launch an IPO in the U.S.

What could become the next biggest Chinese IPO in the United States since Alibaba’s $25 billion 2014 stock market debut could just be around the corner.

Chinese fintech giant Lufax Holding Ltd., a competitor to Ant Group Co., has announced that its plans to launch an IPO on the U.S. stock exchange. The company is seeking to raise up to $2.4 billion from the initial public offering.

Lufax is a financial technology company that offers online lending and investment services. The company plans to sell 175 million American depositary shares for $11.50 to $13.50 according to a filing with the U.S Securities and Exchange Commission, on Thursday.

Amid the economic and trade tensions between the United States and China, Lufax plans to still debut on the U.S. stock market. Washington and Beijing have long thrown punches at each other over trade regulations in both countries. In August, U.S. regulators threatened to stop Chinese companies from registering on American exchanges, in relation to Beijing’s refusal to allow the U.S. to inspect Chinese companies’ audits. Regardless, China and Hong Kong-based firms have, together, raised $10.9 billion from initial public offerings in the U.S. this year, the biggest since 2014, as gathered by Bloomberg.

A spokeswoman for the Shanghai-based Lufax said the company couldn’t comment at the time, a quiet period ahead of the listing.

Lufax once stood as one of China’s largest peer-to-peer lender but has transformed into a financial giant that offers wealth management and retail lending services. Together with the outstanding shares listed on the company’s prospectus, Lufax would be valued at $33 billion.

Over the years, Lufax was forced to transform its business after authorities in China launched a crackdown on the peer-to-peer lending sector. The former P2P lender is now backed by Ping An, the largest Chinese insurer by market value. The company’s assets under management fell 6.1% in 2019 after transaction volumes were slashed by 30% due to asset portfolio adjustment and restrictions on consumer finance products.

According to its filing, the fintech company had a net profit of more than $1 billion on total income of $3.64 billion, In the first half of 2020.

If the IPO is successful, Lufax plans to use the money generated to expand its business, including product development, technology infrastructure, sales and marketing activities, capital expenditures, global expansions, among other necessities. Depending on how much is generated, the company may also consider acquisitions or investments.

Lufax expects to price the offering on October 29, and shares to trade on the New York Exchange by the following day. The banks underwriting the IPO have the option to increase the deal’s size by 15% which could turn out to be the biggest Chinese IPO since 2014, it all depends on where it prices.

The company’s stock will trade under the symbol ‘LU’, according to terms of the deal. To lead the offering are, Goldman Sachs Group Inc., Bank of America Corp., UBS Group AG, HSBC Holdings Plc and China PA Securities.