Ping An's OneConnect Stock Dips After Annual Loss Widens 39% on R&D Spending
Yang Qianwen
DATE:  Feb 21 2020
/ SOURCE:  yicai
Ping An's OneConnect Stock Dips After Annual Loss Widens 39% on R&D Spending Ping An's OneConnect Stock Dips After Annual Loss Widens 39% on R&D Spending

(Yicai Global) Feb. 20 -- Shares of OneConnect Financial Technology, Ping An Insurance Group's fintech unit, fell after the firm reported a steeper annual loss due to a big boost to investment in research and development.

OneConnect's stock price [NYSE:OCFT] fell 3.8 percent yesterday to close at USD12.64, after slumping as much as 12 percent earlier in the day. The company is still 26 percent above the USD10 offering price when it went public last December.

The firm's net loss widened 39 percent to CNY1.66 billion (USD236 million) in 2019, the Shenzhen-based company said in its annual earnings report published yesterday. Revenue jumped 65 percent to CNY2.3 billion.

R&D spending at OneConnect, a major technology-as-a-service platform for financial institutions in China, doubled from the year before to CNY956 million, Chief Financial Officer Luo Weijie said at a press conference. To keep up with the rapidly changing macro and regulatory environment, the firm needs to keep investing in R&D to find innovative technological and business solutions, he added.

Just over half of the company's earnings came from parent firm Ping An Group and its associates. Income from third-party customers more than doubled to CNY1 billion, indicating that the former Ping An technical service department is beginning to stand on its own two feet. 

The novel coronavirus outbreak in China is causing short-term disruption, but over the longer term OneConnect is extremely optimistic, Chief Executive Ye Wangchun said.

Demand for online financial services has risen during the epidemic as brick-and-mortar bank branches are unable to operate normally. The market's awareness of and need for online business management and cloud solutions should grow, Ye added.

OneConnect's China customer base covered over 3,700 institutions at the end of last year, comprising almost all major banks and nearly half of all insurers and enabling some USD300 billion in transactions to their end-customers.

Editors: Dou Shicong, Kim Taylor

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Keywords:   OneConnect Financial,Ping An Insurance,novel coronavirus