Ping An Insurance Raises US1.8 Billion in Hong
Kong Offering
Ping An Insurance, one of China's largest insurance companies,
raised HK$14.3 (US$1.8 billion) in an offering on the
Hong Kong market. The company sold 1.39 billion shares
at HK$10.33 each, according to Goldman Sachs, one of the
underwriters. Ping An had hoped to raise as much as $2.1
billion to boost its capital and expand in China.
Shenzhen-based Ping An Insurance has been one of the fastest
growing insurance companies in China, and rumors
about its overseas IPO had been circulating for more than
a year. The insurer is raising funds to expand in an industry
that grew by 27 percent in terms of premiums to 388 billion
yuan (US$47 billion) last year.
Ping An garnered about HK$128 billion of demand or about
eight times the stock offered to investors. Institutional
investors ordered about HK$80 billion of shares, or 6
times the shares available to them. That doesn't include
the 125.6 million shares bought by HSBC Holdings Plc.
Individual investors in Hong Kong applied for HK$48 billion
of the shares, or 58 times the amount originally offered
to them.
The price is about 2.06 times Ping An's embedded value
per share, a measure used for insurers that reflects the
company's net assets and the value of its business. Based
on today's closing price, China Life trades at about 1.68
times its embedded value of HK$67 billion estimated by
Goldman.
This offering follows on the heels of the China Life
offering earlier this year. Questions about China Life's
financials have put most Chinese offerings under
a cloud. This spillover effect has hit other
Chinese companies as well.
Unlike China Life, which is mostly state-owned, and suffers
from management issues, Ping An has brought in seasoned
insurance veterans from Hong Kong, the UK and the US.
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