Ping An prices IPO

Asia

Ping An Insurance Group, China’s second biggest life insurer after China Life, has priced its initial public share offering on the Shanghai Stock Exchange at between RMB31.8 and RMB33.8 per share. Thirty per cent of the shares will be sold to strategic investors, 25% to institutional investors and the rest to retail or individual investors. However, depending on demand from the latter, a bigger percentage of shares might be allocated to the retail investment sector. The pricing was decided after a series of consultations over six days between Ping An senior management and institutional investors in Beijing, Shanghai, Shenzhen and Guangzhou. The group is expecting to raise around RMB38.9bn (US$5.0bn) from the offering in Shanghai. Ping An and China Life will be the only two insurance stocks publicly listed in China. Both companies are already listed on the Hong Kong Stock Exchange in 2003 and 2004 respectively. The listing in Shanghai reflects the recovery in China’s domestic stock markets (after a four year downturn) with prices doubling in 2006. By contrast, Ping An’s stock price in Hong Kong is roughly down by 20% since it first listed. China Life stock started trading on the Shanghai stock exchange early in January. The proceeds will be used to strengthen the company’s capital base. The company was founded in 1988. Although the group’s core business is life insurance, the group consists of a property and casualty company (China’s third biggest), a fund management company, a stock broker, a bank and a pensions company.