Lufax changes ADS ratio in equivalent of 1-for-10 reverse split
Key Facts
Lufax Holding changed the ratio of its American depositary shares (ADSs) to ordinary shares, so that each ADS represents 20 ordinary shares instead of two, equivalent to a 1-for-10 reverse split for ADS holders. The company said the change was expected to take effect on October 23, 2026, or around that date. The measure applies to ADSs traded in the U.S. market and does not affect the underlying ordinary shares. Lufax said the change does not involve issuing or cancelling ordinary shares. The company’s stock, which trades under the ticker LU, closed at $0.84 on October 22, on the eve of the expected effective date.
The company expected the ADS trading price to rise proportionally after the ratio adjustment, but did not guarantee that it would reach or exceed 10 times its previous level. In its statement, it said, "The company cannot give any assurance that the trading price of the ADSs after the ratio change will be equal to or greater than 10 times the trading price before the change." The expectation describes the change’s relative effect on the ADS price and does not alter the number of ordinary shares represented by the company. Lufax therefore cautioned against treating the expected proportional increase as a guaranteed price level. The company did not say the change was intended to meet listing requirements.
The exchange process varies depending on how the ADSs are held. ADSs held in the direct registration system or through the Depository Trust Company (DTC) will be exchanged automatically, and holders need take no action. Holders of certificated ADSs must surrender them to Citibank, the depositary bank, for cancellation. Holders of certificated ADSs will receive one new certificate for every 10 certificates they hold on the effective date. Under this arrangement, the trading units held by ADS owners change, while the underlying ordinary shares remain outside the issuance or cancellation process.
The depositary will not issue new certificates for fractional entitlements resulting from the exchange. Instead, it will aggregate and sell the fractional entitlements, then distribute the net proceeds to their holders after deducting fees, taxes and expenses. This means holders of certificated ADSs whose holdings do not match full exchange units may receive cash proceeds for the fractional portion, rather than a fractional new ADS certificate. The company explicitly said that "no fractional new ADSs will be issued" as a result of the ratio change. This sets out the practical handling of the adjustment alongside the automatic exchange of electronically registered holdings.
The ratio change comes as Lufax’s results showed declines in income and loan volume, alongside a wider net loss. Total income was 6,227 million renminbi in the second quarter of 2026, compared with 7,365 million in the same period of 2025, a year-on-year decline of 15.5%. The company reported a net loss of 694 million renminbi in the first half of 2026, compared with 519 million in the first half of the previous year, an increase of 33.7%. Outstanding loan balance was 167.3 billion renminbi on June 30, 2026, compared with 193.4 billion on the same date in 2025, down 13.5%. These figures provide financial context for the change, without the company linking them to its decision to adjust the ADS ratio.
Attention now turns to the third-quarter results, which Lufax said it plans to publish after the market closes on Tuesday, October 27, 2026, U.S. Eastern Time. The company scheduled an earnings discussion call for 9 p.m. U.S. Eastern Time that day, corresponding to 9 a.m. Beijing time on October 28. The quarterly results will provide a more recent update on the company’s performance following its second-quarter and first-half figures. The announcement is scheduled for days after the expected effective date of the ADS ratio change. It will also give investors a view of third-quarter performance as part of the company’s regular financial disclosure.