China’s Ping An Plans $2 Billion IPO

January 6, 2004

The Ping An Insurance, one of China’s largest insurers, announced plans to raise approximately U.S. $2 billion in an initial public offering on the Hong Kong stock exchange.

Ping An, a financial holding company which includes insurance, banking, securities and trust units, is based in Shenzhen, a center for South China’s economic growth. Slightly less than 25 percent of the company (in compliance with China’s investment restrictions) is held by a consortium which includes, the U.S. investment banks Morgan Stanley and Goldman Sachs, the U.K.’s Hong Kong and Shanghai Bank and Japan’s Dai-ichi Mutual Life Insurance Co.

The South China Morning Post reported that the company has appointed a new CEO, Dominic Leung Ka-kui, formerly with Prudential Corp Asia, to head its life insurance operations in a bid to boost local interest in the IPO. He will also become chairman and CEO of Ping An Life Insurance.

Ping An will become the third big Chinese insurer to launch an IPO in Hong Kong. Last year China’s largest P/C insurer, PICC Property and Casualty launched a successful IPO, which raised around $695 million. In December China Life’s IPO became the largest of 2003, raising some $3 billion.

There has been strong demand for the shares of both companies. As a result they are now trading at more than twice the initial offering price, which makes the prospects for Ping An’s offering all the more favorable.

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