PICC gets nod for $3 billion-$4b HK IPO

State-owned People’s Insurance Co. (Group) of China Ltd, one of the country’s biggest insurers by premiums, received Hong Kong regulatory listing approval Thursday for its listing in the city, which could raise between $3 billion and $4 billion, a person familiar with the situation said Friday.

PICC-the parent of Hong Kong-listed property insurer PICC Property & Casualty Co. (2328.HK) – won’t start gauging investors’ interest for the offering in a pre-marketing next week even after receiving the approval, the person said.

Typically, once an IPO aspirant’s application is approved, it will hold informal meetings to gauge potential interest, followed by taking orders from investors and then listing on the Hong Kong bourse, a process that will normally be completed within six weeks.

PICC had originally planned to raise $6 billion from a simultaneous listing in Hong Kong and Shanghai in July. But the simultaneous listing is no longer on the cards because it has yet to receive regulatory approval to list in Shanghai, other people familiar with the situation said earlier.

PICC’s planned Hong Kong listing is set to be the city’s biggest since Chinese brokerage Haitong Securities raised $1.8 billion from its April IPO. The deal is widely anticipated, particularly after UK jeweller Graff Diamonds Corp. scrapped its $1 billion IPO earlier this month.

PICC’s IPO comes as the valuations of Hong Kong-listed insurers become attractive. Shares of Hong Kong-listed China Life Insurance Co. Ltd (2628.HK) have lost 6.2 percent in the past one month and are trading at 1.4 times their 12-month forward embedded value, and while Ping An Insurance (Group) Co. of China Ltd (2318.HK) is down 5.8 percent in the past one month and is trading at 1.5 times, according to Factset and a report of Credit Suisse date June 15.

Embedded value represents the future profits an insurer’s existing life-insurance policies are expected to generate.

The company has picked 17 banks to work on the IPO, but has yet to formally assign banking roles, apart from naming the lead sponsors-China International Capital Corp., Credit Suisse Group AG and HSBC Holdings PLC.

http://www.marketwatch.com/story/picc-gets-nod-for-3 billion-4 billion-hong-kong-ipo-2012-06-21

 

Category: Hong Kong