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Goldman-backed Taikang Life Insurance Co. planning $2 billion Hong Kong IPO

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(Bloomberg) — Taikang Life Insurance Co., the Chinese insurer backed by Goldman Sachs Group Inc., plans to seek more than $2 billion from a Hong Kong initial public offering, people with knowledge of the matter said.

The Beijing-based company plans to start the offering as early as in the fourth quarter, said the people, who asked not to be identified because the information is private. Taikang has yet to seek regulatory approval in mainland China and Hong Kong for the share sale, they said.

The nation’s fifth-biggest life insurer follows People’s Insurance Co. (Group) of China Ltd. in selling shares in Hong Kong as a domestic stock market rally boosts profits for the industry. Chinese stocks have added $1.7 trillion in value in the past six months as trading volumes hit a record, data compiled by Bloomberg show.

“Taikang is known for its investment performance and product innovation,” Luo Yi, a Shenzhen-based analyst at Huatai Securities Co., said by phone today. “With the stock market just starting to rise and investor sentiment about insurance stocks improving, the timing is absolutely very good.”

At $2 billion, Taikang’s sale would be the biggest insurer IPO in Hong Kong since PICC Group’s $3.6 billion offering in December 2012, according to data compiled by Bloomberg. PICC Group has gained 9.5 percent since its debut, outpacing the 8.3 percent rise in the benchmark Hang Seng Index.

After the Hong Kong IPO, Taikang may seek another $2 billion selling shares in Shanghai, one of the people said. A Beijing-based spokeswoman for Taikang, who asked not to be named citing company policy, said she couldn’t immediately comment.

Goldman Sachs bought a 12 percent stake in Taikang in 2011 for an undisclosed price. Taikang reported 64.2 billion yuan ($10.3 billion) of premium income in the first 11 months of last year, up 11 percent from the same period of 2013, according to data from China’s insurance regulator.

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