PING An Insurance (Group) Co., China’s second-largest insurer, won regulatory approval for a private placement that may amount to as much as US$5 billion, Hong Kong’s biggest share sale in almost two years.

    The China Securities Regulatory Commission approved Ping An’s H-share offering of as many as 625.9 million new common shares to overseas investors, according to a Friday statement on the watchdog’s website that didn’t give other details. The deal-size estimate is based on Ping An’s closing share price Thursday.

    Ping An joins smaller PICC Property & Casualty Co. and China Taiping Insurance Holdings Co. in tapping the stock market for further growth amid improved prospects for the sector.

    Shenzhen-based Ping An said last month that third-quarter profit jumped 90 percent as banking revenue expanded and a stock market rally bolstered investment returns.

    “Ping An has very diverse businesses and every section needs a lot of capital,” said Chen Xingyu, a Shanghai-based analyst at Phillip Securities Research. “We thought the company was likely to raise more money, but didn’t expect it to come so soon.”

    Insurers may also be preparing for increased investment opportunities expected from a planned trading link between Shanghai and Hong Kong’s stock exchanges, Chen said.

    Ping An last year sold 26 billion yuan (US$4.3 billion) in convertible bonds. That was enough to support “normal” business growth for two to three years, chief financial officer Jason Yao said.

    Ping An’s third-quarter results exceeded market expectations, with the banking business expanding rapidly and insurance and trust operations leaving competitors further behind, Citic Securities Co.’s Shenzhen-based analyst Tong Chengdun wrote in a report Oct. 28.

    Chinese insurers’ fundamentals are improving this year on both premium growth and investments, as fewer policy surrenders and smaller repayments on maturing contracts reduce their cash-flow pressures, Ping An Securities Co. analysts led by Beijing-based Jiao Wenchao wrote in a report Nov. 3. The firms’ third-quarter results were brilliant, they wrote.

    PICC P&C, China’s biggest non-life insurer, said earlier last week it plans to raise 7.25 billion yuan in a rights offer in Hong Kong and on the mainland. (SD-Agencies)