FinTech IPO Index Soars 5.2% as Lufax Is Up 73% Post-Earnings

There were a few stunning surges this past week with the FinTech IPO Index, which added more than 5% through five sessions. And, as has been seen in the past few weeks, earnings were the key driver. Lufax Holding shares rallied about 73%. The company reported earnings this week that showed that the company’s cumulative number of borrowers increased by 10% to about 20.9 million as of Dec. 31, 2023, from about 19 million as of Dec. 31, 2022. New loans enabled were 47 billion yuan ($6.5 billion) in the fourth quarter of 2023, compared to 77.8 billion yuan ($10.7 billion) in the same period of 2022, representing a decrease of 39.6%. Days past due 30+ delinquency rate for the total loans the company had enabled was 6.9% as of Dec. 31, 2023, as compared to 6.0% as of Sept. 30, 2023 and 7.7% as of Dec. 31, 2023. OneConnect’s own fourth-quarter results drove shares 3.6% higher. Revenue in the fourth quarter of 2023 decreased by 25.6% to 925 million yuan ($128 million), primarily due to a decline in transaction-based and support revenue, the company said. Implementation revenue decreased by 31.7% on a year-over-year (YoY) basis. OneConnect shares were up 3.6%.

Other Names Decline on Earnings

The staggering rally helped offset the 26.1% slide in Oportun’s stock. The company’s fourth-quarter results noted that in the latest quarter, its membership roster was 2.2 million, an increase of 18% compared to the prior-year quarter. Products were 2.4 million, an increase of 19% compared to the prior-year quarter, and aggregate originations were $437 million, down 28% year on year. The annualized net charge-off rate of 12.3%, down from 12.8% for the prior-year quarter. Katapult shares were off 11.3%. The latest earnings noted that gross originations were $67.5 million, an increase of 13%, while total revenue was $56.7 million, an increase of 16.1%. The current year’s expectations are that the company will see a projected 12% to 14% boost in revenue YoY. dLocal shares gave up 10.6%. The earnings report this week detailed that total payment volume was up 55% YoY and 11% quarter-over-quarter revenue of $188 million was up 59% YoY and 15% quarter-over-quarter, per the company’s release. Futu Holdings reported fourth-quarter results that detailed that the total number of paying clients increased 15% YoY to 1.7 million of Dec. 31. The total number of registered clients increased 10.2% YoY to 3.6 million in the December quarter. The total client assets increased 16.3% YoY to 485.6 billion Hong Kong dollars ($62 billion) as of Dec. 31. Total trading volume in the fourth quarter of 2023 decreased by 12.5% YoY. Futu shares slipped 1.8% through the week. Huize Holding said this past week that in its most recent report, gross written premiums facilitated on its platform for the full year of 2023 increased by 18.2% YoY. First year premiums surged 42% YoY. Renewal premiums increased by 3.9% YoY to 3.179 billion yuan ($440 million). Huize shares rallied 8.4%. Not everything was earnings related. nCino said, as reported here, that it plans to acquire DocFox to create a single platform enabling financial institutions to manage the entire client lifecycle. The combined solution will encompass information intake, document collection and due diligence, the companies said, with a month-end closing. DocFox provides solutions that simplify and automate onboarding experiences for commercial and business banking. nCino shares were up 1.8%. Nuvei shares soared 28.9% amid reports that the Canadian FinTech is reportedly close to being acquired by private equity company Advent International. The payments processor, backed by actor-investor Ryan Reynolds, is in advanced discussions with Advent, according to media reports.