What happened
Shares of OneConnect Financial Technology (OCFT 1.62%) rocketed 103.6% higher in 2020, according to data provided by S&P Global Market Intelligence. The Chinese fintech player actually had its IPO back in December of 2019, so 2020 marked its first year as a public company. Like many software stocks, OneConnect rocketed higher beginning in April, as investors anticipated the acceleration of the digital economy, which was soon borne out by strong financial results.
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So what
Although the COVID-19 pandemic caused the world economy to plunge into a recession, with financial companies pulling back on lending and other activity, OneConnect still put up impressive numbers, with revenue accelerating throughout the year to last quarter's impressive 50.7% growth.
OneConnect offers software specifically tailored to Asian financial institutions, across originations, risk management, operations, and cloud back-end services. Chinese financial institutions are relatively under-penetrated in terms of digitization, so the growth prospects for OneConnect are tantalizing, as evidenced by its strong revenue growth even in the midst of a pandemic.
Now what
OneConnect seems like a promising international growth stock that flies under the radar of many U.S. investors. While it is true that the company still generates fairly hefty operating losses, and depends on parent company Ping An Insurance Company of China (OTC: PNGAY) for a large chunk of business, there's no doubt it has a tantalizing market opportunity, and the market took notice and applauded it throughout last year.
