Lufax To Repurchase Shares Worth $300M; Street Sees 31.1% Upside

Chinese personal financial services platform Lufax Holding (LU) has announced a $300 million stock buyback program to repurchase its American Depository Shares (ADSs) over the next six months.

Lufax plans to make the repurchases from its current cash on hand and may enact the transactions via the open market, private negotiations, or block trades.

Additionally, Lufax’s chairman, co-CEO, and other members of its top brass plan to use their personal funds to buy up to $5 million worth of ADSs over the next six months.

Furthermore, Lufax’s senior management has agreed to a lock-up period of at least six months for the repurchased shares.

The company noted that this share acquisition plan by its top management shows its confidence in the fundamental and long-term growth of Lufax. After the purchase, they expect the interests of management to be further aligned with those of Lufax investors. (See Lufax Holding stock analysis on TipRanks)

On April 27, Stifel Nicolaus analyst Scott Devitt reiterated a Hold rating on the stock and lowered the price target to $16 (30.7% upside potential) from $17.

Devitt commented, “Lufax is well-positioned to benefit from industry tailwinds in China domestic lending and personal investment as one of the largest players in the retail lending market.”

Consensus among analysts is that Lufax Holding is a Moderate Buy based on 3 Buys, 2 Holds, and 1 Sell. The average analyst price target of $16.05 implies 31.1% upside potential.

Shares have dropped about 14.4% so far this year.

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