Deutsche Bank has resumed coverage of Lufax Holding Ltd with a hold recommendation, following a near two-year suspension prompted by auditing concerns. The bank set a price target of $1.40 per share for the New York-listed stock, while suspending its rating for the Hong Kong-traded shares pending the resumption of trading.
The Frankfurt-based lender’s decision follows Lufax’s normalization of financial disclosures and completion of an auditor review covering historical statements from 2022 to 2025. The review addressed deficiencies in internal controls and historical accounting distortions identified in a prior dispute with the company’s previous auditor.
Lufax has since restructured its business model, shifting toward smaller unsecured loans for small businesses and achieving a more balanced credit portfolio. The consumer finance segment now accounts for 39% of the total loan portfolio, up from 25% previously, as the company diversifies its customer base and deepens its municipal-level penetration. The revenue model has also transitioned from upfront loan origination fees to payments collected over the duration of each operation.
Analysts at Deutsche Bank, led by Johnny Xie, project a return to profitability this year, forecasting earnings of $0.37 per share after reporting a second-quarter loss of $0.12 per share. Revenue for the quarter totaled $6.23 billion, while new credit concessions rose 4.6% year-over-year to RMB 51.1 billion. Consumer credit sales growth accelerated 27.6%.
At Wednesday’s close, Lufax’s New York-listed shares traded at $1.30, down $0.04 or 2.99%, valuing the company at $1.13 billion. InvestingPro analysis indicates the shares appear undervalued relative to their fair value estimate.
