The world’s second-largest insurer by market value is struggling to reinvent itself as a unicorn hub. Wariness by public investors toward unprofitable companies spells bad news for Ping An Insurance (Group) Co., which has plenty of tech firms it wants to take public at some point.The latest casualty is OneConnect Financial Technology Co., a cloud-based back-end platform for banks and insurers. A planned initial public offering in the U.S. set for Thursday was cut by almost half to just $260 million from a target of $504 million. Ping An didn’t give an official reason. Valuations of the unprofitable fintech company will now fall to half of the  $4.4 billion to $5.2 billion range floated when investors were sounded out last week.That’s a blow to Ping An’s “technology-plus-finance” ambitions. Will the insurer lick its wounds or plow ahead? It can have a word with Masayoshi Son, still smarting from the WeWork debacle. His SoftBank Vision Fund bought into OneConnect last year at a valuation of $7.5 billion. 

All this is a shame, because OneConnect is perhaps the Shenzhen-based company’s strongest spinoff, providing a needed service to financial institutions struggling with legacy computer systems. It operates in a less-competitive space than Ping An’s consumer-focused apps.

Ping An Healthcare and Technology Co., the online platform better known as Good Doctor, is a medical portal that competes with Tencent Holdings Ltd.’s WeDoctor. Its Hong Kong post-listing performance has been weak. After languishing for much of the year under its IPO price, the stock has only recently been in the black.

Then there’s Lufax, which is more than 40% owned by Ping An and is also struggling. The world’s most valuable financial technology startup just three years ago, Lufax was caught up in Beijing’s clampdown on peer-to-peer lenders and is now reshaping itself as a consumer-finance company. It’s safe to say it won’t be listing anytime soon.

Even China’s hottest companies have struggled to raise capital. OneConnect’s travails don’t bode well for another of Ping An’s B2B firms, HealthKonnect. The cloud platform for the healthcare sector was valued at $8.8 billion after a fundraising early last year. Now, the unprofitable startup will have to push any potential IPO plans further down the road.

Ping An’s tech ambitions have allowed it to trade at 2.35 times book value versus 1.44 times for rival China Life Insurance Co., though the state firm has outperformed it in the past 12 months. Ping An trails only Berkshire Hathaway Inc. in market value as an insurer globally, but it’s a lot more expensive than Warren Buffett’s firm, which trades at 1.4 times book.

The 31-year-old company set up OneConnect only in 2015, and perhaps one day it will be more a tech giant than an insurer. But fintech and “healthtech” made up just 4.1% of third-quarter revenue. Investors should remember that. 

To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.net

To contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

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