Shares for China Life Insurance Co are expected to soar up to 73
percent on their Chinese mainland trading debut tomorrow, analysts
said.
The shares for the mainland's biggest life insurer seem likely
to trade for between 28.69 yuan (US$3.67) and 32.69 yuan
(US$4.18) apiece, said Wu Yonggang, an analyst at Guotai
Jun'an Securities.
This view was mirrored by Erwin Sanft, head of China Research of
BNP Paribas Securities (Asia), who estimated the shares would jump
to over 30 yuan (US$3.8) each.
Beijing-based China Life offered 18.88 yuan
(US$2.42) apiece for its A shares. The company raised 28.32
billion yuan (US$3.62 billion) by selling 1.5 billion yuan
(US$191.9 million)-denominated A shares.
Public investors paid 832.5 billion yuan (US$106.5 billion), or
an oversubscription rate of 49 times, for the shares offered to
them in December.
"The company enjoys a bright prospect for growth," said Wu.
"That's why it has wooed so many investors despite its high
price-to-earnings ratio."
China Life's PE ratio tops as high as 97.8, while the
figure for main big-caps stands at around 30.
The bullish sentiment seen in the mainland stock market was of
big help in the heavy buying of China Life shares, analysts said.
The Shanghai Composite Index gained 130 percent in 2006, rebounding
from a five-year low.
China Galaxy Securities Co and China International Capital Corp
are the underwriters for China Life's share sale. The insurer's
shares ended at HK$26.10 (US$3.35) in Hong Kong on Friday, down 3.3
percent. Its H shares have almost doubled since September following
the insurer's announcement of its plan to sell shares on the
mainland.
China Life, already listed in New York and Hong Kong, will be
followed by Ping An Insurance, the second-biggest insurer on the
Chinese mainland, in going public on the mainland.
Shenzhen-based Ping An plans to sell up to 1.15 billion A shares
in Shanghai.
The Chinese mainland's insurance market is seeing a
trail-blazing rise due to the rising middle class's need for
financial protection. The government is also supporting the
commercial insurance market, as part of the mainland's US$1.9
trillion household savings
could be channeled to it.
(Shanghai Daily January 8, 2007)