Sources Say New China Life Files for up to $4 Billion IPO

New China Life, the country’s third-largest life insurer, has filed an application to list in a dual Hong Kong and Shanghai IPO, sources said, braving volatile markets to raise up to $4 billion.

New China Life, in which Swiss insurer Zurich Financial Services has a 15 percent stake, filed its A1 listing document with the Hong Kong stock exchange on Thursday, pushing ahead with plans for an IPO in coming weeks, according to four sources with direct knowledge of the plans.

The sources could not be identified because the details have not been made public.

Chinese companies including China Everbright Bank and Guangfa Bank plan to raise up to $35.4 billion in share sales in Hong Kong and China by the end of the year, according to Thomson Reuters calculations.

A worsening global stock market condition, however, could disrupt the IPO pipeline and companies are expected to price their offerings conservatively to ensure healthy demand for their shares, analysts said.

“Weak market will hurt sentiment in IPOs too,” said Cheng Yi, an investment adviser with the sales department of Xiangcai Securities in Shanghai.

“Previously, clients were also worried that IPO shares might fall on listing day. We have been telling them they still can make money from IPO shares as companies have priced their IPOs more conservatively nowadays,” he added.

Founder Securities, the Chinese partner of Credit Suisse, surged 44 percent on its Shanghai stock market debut on Wednesday, aided by a shift in investor sentiment after a massive equities selloff that investors think was overdone.

New China Life had originally planned to raise as much as $4 billion with a dual listing as soon as September, local and state media reported.

The company aims for a hearing with the Hong Kong exchange’s listing committee on Sept. 22, with the IPO set for sometime in October, two sources said.

New China Life hired BNP Paribas, Bank of America, Merrill Lynch, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, UBS AG and China International Capital Corp (CICC) to handle the dual listings, reports said.

To proceed with the dual-listing, New China Life must also obtain approval from the China Securities Regulatory Commission (CSRC) for the Shanghai-portion of the offering.

‘WAITING FOR GOOD WINDOW’
Another big insurance IPO expected to hit the market later this year or early next year is People’s Insurance Company of China Group’s (PICC) $5-6 billion dual-listing in Hong Kong and Shanghai.

Taikang Life Insurance Co Ltd, in which Goldman Sachs has a 12 percent stake, is also eyeing a Shanghai listing, local media reported.

Guangfa Bank, previously known as Guangdong Development Bank, is waiting for a “good window” to launch its 35 billion yuan ($5.5 billion) dual-listing in Hong Kong and Shanghai, a local newspaper reported on Thursday.

“We are not in urgent need of capital. We just want to wait for a good window,” Chairman Dong Jianyue was quoted as saying by the Dongfang Daily.

The Chinese lender, part-owned by Citigroup, initially planned to launch the IPO in the third quarter of this year.