PING An Insurance (Group) Co., China’s second-largest insurer, yesterday said it will raise HK$36.8 billion (US$4.75 billion) in Hong Kong’s biggest share sale in almost two years to replenish equity and working capital.

    The Shenzhen-based company will sell 594 million new H shares to no more than 10 investors at HK$62 apiece in the placement, according to a statement to the Shanghai Stock Exchange yesterday.

    Ping An, which lists shares in Hong Kong and Shanghai, joins smaller PICC Property & Casualty Co. and China Taiping Insurance Holdings Co. in tapping the stock market for further growth.

    China’s top 25 insurers may need more capital as their assets expand and investment appetite becomes more aggressive after the regulator widened their options in recent years, Standard & Poor’s said in a Nov. 17 report.

    “The announcement of the successful placement removes the capital overhang on the stock,” Jefferies Group Inc. analysts, led by Hong Kong-based Baron Nie, wrote in a report. “We believe Ping An’s valuation remains attractive, especially given its strong insurance business fundamentals.”

    The share sale will help Ping An meet higher capital requirements expected from regulators, boost its market share in its main business sectors of insurance, banking and asset management, and seize opportunities in Internet finance, the firm said in a statement.

    The net proceeds from the sale are expected to be about HK$36.5 billion, it said, adding the sale represents 7.5 percent of the company’s existing share capital and 19 percent of the current H shares.

    The placement price represents a premium of about 1.27 percent over the average closing price of approximately HK$61.22 per H share quoted on the Hong Kong stock exchange for the last 20 consecutive trading days prior to the date of the signing of the placing agreement, according to the statement.

    Ping An said Nov. 7 that it won China Securities Regulatory Commission approval to sell as many as 625.9 million new common shares to overseas investors.

    The solvency ratio of its property insurance unit, which measures its ability to settle claims, stood at 151.9 percent as of June 30, only slightly above the 150 percent regulatory requirement. (SD-Agencies)