Bloomberg News

Ping An Shares Jump on HSBC Stake Sale to Thai Group

December 04, 2012

HSBC to Sell Ping An Stake for $9.4 Billion to Charoen Pokphand

A man walks past a Ping An Insurance (Group) Co. advertisement in Beijing, China. Photographer: Tomohiro Ohsumi/Bloomberg

Ping An Insurance (Group) Co. (2318) shares rose the most in eight months, leading Chinese insurers higher, after HSBC Holdings Plc (HSBA) said it will sell its entire stake for $9.4 billion to a Thai company, removing investor uncertainty.

Ping An, China’s second-largest insurer, advanced 4 percent to HK$59.95 as of 10:37 a.m. local time, the most since April 13. The stock was the fourth-biggest contributor to the 0.7 percent advance in the Hang Seng Index (HSI) and had the third-biggest gain in the benchmark. The insurer’s shares were the most actively traded on the benchmark in terms of volume and value, with 261.79 million shares worth HK$15.45 billion ($2 billion) changing hands so far today.

“The announcement of the sale of the entire stake removed some overhang concern on Ping An’s share price,” Arjan van Veen, a Hong Kong-based analyst at Credit Suisse Group AG, said.

The HSBC (5) deal spurred gains in other Chinese insurers, with New China Life Insurance Co. surging 9 percent on the Shanghai stock exchange, its biggest gain since June. China Life Insurance Co., the nation’s biggest insurance company, added 2.5 percent in Hong Kong trading. China Pacific Insurance (Group) Co. jumped 5.2 percent in Shanghai, its biggest gain since June.

HSBC, Europe’s biggest bank by market value, is selling the 15.6 percent stake at HK$59 a share to Thailand’s Charoen Pokphand Group Co., it said in an e-mailed statement today. The price is higher than Ping An’s closing price of HK$57.65 in Hong Kong yesterday.

Welcome Investment

The Chinese insurer welcomes Charoen Pokphand as a long- term strategic investor, Sheng Ruisheng, spokesman for Ping An, said in a telephone interview today. The company will keep its existing management system, governance model and culture, he said.

“Charoen Pokphand Group fully agrees to and trusts Ping An’s strategy, culture, business model and management team, which will encourage us to be more resolute on the company’s strategy, its existing management systems, governance model and operational culture,” Sheng said. “We respect HSBC’s choice and thank them for their contributions in the past 10 years.”

Ping An Chairman Peter Ma has overseen the expansion of Ping An into the world’s third-largest insurer by market value, as well as banking, securities and money management operations, since he founded the company in the southern Chinese city of Shenzhen 24 years ago.

The company’s new business value, which gauges the estimated profit from new policies sold, may grow a “strong” 13 percent in the second half of this year as agent sales shift back to long-term risk-protection products, improving from a 9 percent drop in the first half, Barclays Plc said in a report e- mailed Nov. 14.

Founded in 1988 as China’s first joint-stock insurer, Ping An has grown into the nation’s second-biggest insurance company, with 74 million clients, more than 175,000 employees, and about 500,000 agents.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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