OneConnect Financial Technology (NYSE:OCFT) Co., Ltd. (NYSE:OCFT and HKEX:6638), known for providing technology services to financial institutions in China, has announced a temporary halt in its depositary operations. The company stated today that the suspension is due to the custodian transition of its depositary bank, JPMorgan Chase (NYSE:JPM) Bank, N.A.
The interruption will affect the issuance and cancellation of American depositary shares (ADSs) on the New York Stock Exchange. Specifically, from July 29 to August 9, 2024, conversions between ADSs and ordinary shares on the Cayman share register will be unavailable. Additionally, from August 5 to August 9, 2024, conversions involving ADSs and ordinary shares on the Hong Kong Stock Exchange or the Hong Kong share register will be suspended.
Operations are scheduled to resume on August 12, 2024. During this period, the trading of the company's securities will continue unaffected on both the New York Stock Exchange and the Hong Kong Stock Exchange.
OneConnect emphasized that aside from the conversion services, all other trading activities will proceed as normal, ensuring minimal disruption to shareholders and investors. The company's leadership, under Chairman and CEO Chongfeng Shen, has duly authorized this announcement in compliance with the Securities Exchange Act of 1934.
This information is based on a press release statement from the company.
In other recent news, OneConnect Financial Technology Co., Ltd. reported a mixed set of financial results for the first quarter of 2024. Despite a decline in revenue of 19.1% year-over-year, the company saw an improved gross profit margin of 37.7% and a narrowed net loss. A significant development was the sale of its virtual banking business to Lufax for HKD933 million, a move indicative of a strategic shift towards quality growth and overseas expansion.
OneConnect is committed to achieving its mid-term profitability targets, with a focus on integrating finance and technology to develop the financial industry. The company is also keen on expanding its overseas business and improving third-party revenue. Among these recent developments, OneConnect aims to leverage its technology strength in the gamma platform and explore new growth opportunities.
The company's strategic disposal and the stability of its revenue mix underscore its focus on optimizing its business model. Investors are closely watching OneConnect's execution of its strategy, particularly its commitment to product upgrades, customer expansion, and overseas market penetration.
InvestingPro Insights
As OneConnect Financial Technology Co., Ltd. (NYSE:OCFT) navigates through its depositary operations suspension, investors may be seeking deeper insights into the company's financial health and market position. According to InvestingPro, OneConnect holds more cash than debt, which is a reassuring sign of financial stability, especially during operational transitions. Furthermore, despite the recent challenges, the company has experienced a significant return over the last week, with a price total return of 8.33%.
In terms of valuation, OneConnect is trading at a low Price / Book multiple of 0.21 as of the last twelve months ending Q1 2024. This metric may attract investors looking for potentially undervalued companies within the software industry. However, it's important to note that analysts anticipate a sales decline in the current year, and the company is not expected to be profitable within the same timeframe.
InvestingPro Data shows a market capitalization of $2.15 billion, reflecting the size and scale of OneConnect in the financial technology sector. The negative P/E ratio of -41.09 indicates that investors are currently not receiving earnings for their shareholdings, which aligns with the company's lack of profitability over the last twelve months. Additionally, the revenue has declined by 19.4% in the same period, underscoring the challenges faced by the company.
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