Goldman Sachs Downgrades Lufax Holding Ltd (LU) to Neutral
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Goldman Sachs analyst Thomas Wang downgraded Lufax Holding Ltd (NYSE: LU) from Buy to Neutral with a price target of $9.80 (from $20.30).
The analyst comments "Recent comments by a CBIRC official on the need to strengthen regulation on market participants other than banks in order to reduce borrowing costs suggest that regulatory scrutiny on Lufax (LU) and other loan facilitation platforms is likely to increase. We highlight that several regulations have been proposed or implemented, which could affect different parts of the loan facilitation business model, including facilitation, risk underwriting, credit scoring, and credit insurance. Broadly, we expect these regulations, and their key target of reducing borrowing costs for MSEs (micro and small enterprises), to put downward pressure on loan yield and take rate for LU, leading to lower margins."
Shares of Lufax Holding Ltd closed at $7.50 yesterday.
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