Cheung Kong Holdings
Hutchison Whampoa, one of Hong Kong’s largest listed companies, is controlled by Cheung Kong Group, a property company. Hutchison's operations span ports, property and hotels, retailing, power generation and telecommunications. It owns Cheung Kong Infrastructure, and is headed by Li Ka-shing, Asia’s wealthiest man.
Ming An offering seeks HK$1.3b
Ming An (Holdings), a Hong Kong-based non-life insurer, plans to raise as much as HK$1.32 billion by listing shares on the local market to fund mainland expansion, sources close to the deal said.
In its initial public offering, Ming An will offer 700.3 million shares, 601.3 million of which are new shares and the rest from its three shareholders, including Cheung Kong (Holdings).
The shares will be marketed at HK$1.28 to HK$1.88 each, according to a sale document obtained by fund managers. The firm could sell a further 105 million new shares if demand is strong.
The indicative price range represents 1.26 to 1.64 times the company's book value this year, and 1.16 to 1.53 times next year's.
In terms of price-to-book value, Ming An's shares deserve a 18 per cent to 36 per cent discount to that of China's largest non-life insurer, PICC Property and Casualty, due to its smaller size and lesser mainland exposure, a source close to the transaction said.
Ming An hopes to use most of the IPO proceeds to fund its China expansion by setting up branches in cities and provinces such as Beijing, Shanghai, Jiangsu, Zhejiang, Shandong and Hubei. Part of the money will be spent in Hong Kong to maintain its market share.
The insurer's direct written premiums generated through agents represented 38.8 per cent of its general insurance direct written premiums last year, which slid to 35.1 per cent in the first half of this year.
Cheung Kong will see its stake in Ming An fall to 21.7 per cent from 29 per cent after the IPO.
Cheung Kong deputy chairman Victor Li Tzar-kuoi yesterday said the two companies may have business co-operation, adding mainland rules prevent the firm becoming Ming An's biggest shareholder.
Credit Suisse is the global co-ordinator and bookrunner of Ming An's offer. The investment bank declined to comment on the deal.
The offer was opened for institutional subscription yesterday while the retail subscription is expected to start on December 4.