OneConnect Rises 5% on Strong Q1 Revenue

The cloud-native tech solutions provider will hope to narrow its losses going forward.

Author: Anthony Russo   

The stock in OneConnect Financial Technology Co., Ltd. (NYSE: OCFT) rose 5% to $10.58 per American depositary share on reporting strong revenues for the first quarter. 

The cloud-native tech solutions provider said in a statement today that in the three months through March revenues hit $81.83 million, up 30% year-over-year. OneConnect attributed the growth to its third party customers, which reached $38.02 million.

However, net loss in the quarter remained flat at $58.45 million compared with the same period in 2019. The mixed results reflected the coronavirus outbreak, which has affected China since December. 

"While some transaction activities did slow down, we believe the impact will only be temporary," Ye Wangchun, the chairman of the board and chief executive officer of OneConnect, said in a statement today. 

He added, "The pandemic has led more financial institutions to rethink their IT strategies, accelerating demand for digitalization and interest in our cloud-based solutions. This was exemplified by the fact that revenue from third-party customers rose by 50%, exceeding our overall growth rate."

This marks OneConnect's second financial report since going public in December, raising $382.4 million in its IPO with underwriters exercising their over-allotment option. As of early Wednesday, shares of the company are trading nearly 6% higher from its IPO issue price of $10 per share.

Operating as an affiliate of Chinese conglomerate Ping An Insurance, OneConnect provides technology applications business services in the financial service sector. Based in Shenzhen, the company has won 23 technology awards in global competitions. 

Going forward, OneConnect noted uncertainties remain with Covid-19 and did not provide guidance for the next quarter. The company will hope to narrow its losses and turn profitable going forward. 

Jacky Lo, the chief financial officer of OneConnect, concluded in a statement today, "As China begins its path to recovery, we aim to continue expanding our base of premium customers and further deepen our relationships to drive top-line growth, while maintaining diligence in cost management and propelling our company towards profitability."