Ping An set for mega IPO

SHANGHAI: Ping An Insurance (Group) Co, China's second-largest life insurer, yesterday set its Shanghai initial public offering (IPO) price at the upper limit of 33.8 yuan apiece, according to the firm's statement to the Shanghai Stock Exchange.

Ping An's offer price is the highest of those previously offered by other financial stocks on the A-share market, making Ping An's the world's largest insurance IPO.

Shenzhen-based Ping An is to raise 38.87 billion yuan by selling 1.15 billion shares. About 1.1 trillion yuan was frozen during the subscription period for Ping An's A shares. The company is expected to list on the Shanghai Stock Exchange on March 1 and to be included as a constituent stock on the Shanghai Composite Index on the 11th transaction day.

"The listing of Ping An includes its securities, trust, banking and asset management services. It is the first diversified services financial stock to list on the Shanghai bourse," said Zhang Yidong, an analyst at Industrial Securities.

Ping An is the second Chinese insurer to list on the Shanghai Stock Exchange, following China Life, which made its debut on January 9. "Ping An is performing well," said Zhang Fan at Changjiang Securities.

Its earning per share in the first nine months last year was 0.59 yuan, and its net asset per share amounted to 5.55 yuan. It is the second-largest life insurer and the third-largest property insurer in China.

Ping An's IPO price is 1.8 times that of China Life, China's largest life insurer, which set the price at 18.88 yuan. China Life yesterday rose 2 percent to close at 36 yuan at the Shanghai bourse, while its H shares dropped 0.86 percent to close at 23.05 yuan.

"Ping An will have a higher profitability than China Life because of its more diversified services, which are more profitable," said Zhang at Changjiang.

Ping An has a strong market base in China's big cities, such as Beijing and Shanghai, while China Life, the State-owned insurer, mostly focuses on the markets in the second- and third-tier cities, according to Zhang.

"We expect Ping An's share price will be over 50 yuan apiece on the first transaction day because of the price premium to China Life's H shares," said Zhang. Ping An's H shares were down 0.65 percent to close at HK$38.1 yesterday.

Source: China Daily