ZhongAn Online P&C 6060

[winston]

Chinese online insurer ZhongAn wins HK approval for $1 billion IPO: sources

by Julie Zhu and Elzio Barreto

HONG KONG (Reuters) - ZhongAn Online Property and Casualty Insurance Co Ltd, China’s first internet-only insurer, secured Hong Kong stock exchange approval for its planned initial public offering which could raise more than $1 billion, sources with direct knowledge of the deal said on Friday.

The company plans to start gauging investor appetite for the IPO as soon as Monday after receiving the nod from the listing committee of the Hong Kong stock exchange, added the sources.

It plans to launch the IPO and take orders from investors on Sept. 18.

The sources could not be named because details of the deal are not public. ZhongAn did not immediately reply to a Reuters request for comment on its IPO plans.

The IPO would be the biggest by a financial technology company (fintech) in the city, which wants to lure more new listings of so-called new economy startups.

Hong Kong has had $5.73 billion worth of new listings so far in 2017, compared with $21.3 billion in all of 2016, Thomson Reuters data showed.

ZhongAn is among several Chinese fintech companies tapping investors to fund expansion as consumers move more of their banking, payments, investing and insurance online.

Last year, Ant Financial, the world’s most-valuable fintech company, raised $4.5 billion, one of the biggest funding rounds for a private internet company, while peer-to-peer lending and wealth management platform Lufax raised $1.2 billion and JD Finance, the finance subsidiary of online direct sales firm JD.com (JD.O), raised $1 billion.

Zhong An was founded in November 2013 by Alibaba Executive Chairman Jack Ma, Tencent Chairman Pony Ma and Ping An Insurance Group Co of China Ltd (2318.HK) Chairman Ma Mingzhe.

Its major shareholders include two of China’s largest internet companies - Alibaba Group’s (BABA.N) Ant Financial affiliate with 16 percent, and Tencent Holdings Ltd (0700.HK) with 12.1 percent. Ping An also holds 12.1 percent, according to ZhongAn’s IPO prospectus.

Source: Reuters

https://www.reuters.com/article/us-zhon ... SKCN1BJ0GD

[winston]

not vested

Online insurer Zhong An applies for US$1.5bn Hong Kong IPO

Making use of big data analytics, the company designs and offers innovative ecosystem-oriented insurance products through scenario-based policies covering things like phone loss and flight delays.

Zhong An claims to be the largest insurer in China in terms of the number of customers served and policies sold.

From its inception in October 2013 to the end of 2016, it sold over 7.2 billion insurance products and served over 492 million customers, according to the company’s filing to the Hong Kong bourse on Friday.

Its net profits for the years 2014, 2015 and 2016 were 36.9 million yuan, 44.2 million yuan and 9.4 million yuan respectively, while its gross written premium in those years was 794 million yuan, 2.3 billion yuan and 3.4 billion yuan respectively.

Source: SCMP

http://www.scmp.com/business/companies/ ... g-kong-ipo

[winston]

not vested

Unpacking Zhong An’s IPO Prospectus

Taking a deeper look into Shanghai-based Zhong An Insurance's products, partnerships, and regulatory landscape.

Zhong An embeds its products directly into the platforms of its 180+ partners. But close to 70% of its GWP is generated from sales on the platforms of its top five partners.

Source: CB Insights

https://www.cbinsights.com/research/zhong-an-ipo-data/

[winston]

Are there bubbles in Zhong An Insurance's IPO?

In the first quarter of 2017, Zhong An made a CNY317 million loss.

If we take a look at their financial report, we can see that most of the profits came from investment, while the underwriting made losses.

Industry observers also noted Zhong An’s significant reliance on stakeholders. An example is investor Alibaba’s Taobao e-commerce site, through which Zhong An managed to generate CNY613 million (2014), CNY1298 million (2015) and CNY1194 million (2016) in shipping fee insurance premiums.

Despite the decline in claims for shipping fee insurance from 77.2% in 2014 to 35% in 2016, shipping fees claims payout still weighs the most among all its product lines.

Source: Asia Insurance Review

http://www3.asiainsurancereview.com/Mag ... ?aid=39741

[winston]

not vested

Online presence favors valuation

by Carrie Chen

24 Jul 2017

The market valuation of ZhongAn has received recognition for its worth, but the high valuation seems to come mainly from its additional value as an internet company and not its core insurance business.

Established in 2013, ZhongAn registered with capital of 1 billion yuan (HK$1.15 billion). Later, in June, 2015, the insurer finished its "A-round" funding, which raised about 5.78 billion yuan.

It attracted investors including Morgan Stanley, CICC, CDH Avatar, Keywise ZA Investment and Equine Forces. Shares of ZhongAn were offered at 24 yuan apiece at the time.

Based on the insurer's 36.98 million yuan net profit in 2014, the price-to- earning ratio was about 800 times, raising the company's value to about 30 billion yuan.

And earlier this year, ZhongAn was reportedly being valued at over 100 billion yuan.

As of last Friday, P/E ratio of Ping An Insurance (2318) was about 14.84 times, China Life Insurance (2628) was about 34.43, China Pacific Insurance (2601) was 23 and New China Life Insurance (1336) was 27.59.

Analysts said the gap in the P/E ratio between ZhongAn and other traditional insurers was due to the different system of valuation applied to different types of companies.

"For an internet company, the valuation may not be based on its P/E ratio, but its realizability from its clients. Even though its users are not able to bring profit to the company in short term, it can also be given higher valuation if the market has seen great potential in the company to realize profit in future and potential for growth," says an analyst.

One factor in the valuation is customer data, including the number of users, user growth expectations and expected revenue and profit from each user.

ZhongAn has a great advantage in the number of users. By end of 2016, ZhongAn has sold over 7.2 billion policies, serving over 492 million customers.

Compared with traditional insurers, the valuation of ZhongAn was closer to the way that the market values an internet company or a financial company, analysts say.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 70724&fc=1

[winston]

Leading insurer has major backers

by Carrie Chen

Lifestyle consumption generated the most GWP with 1.62 billion yuan in 2016, while travel ranked second with 1.08 billion yuan.

GWP of consumer finance was 319.08 million yuan and health was 235.93 million yuan. Auto insurance contributed the least to total GWP with 3.72 million yuan.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 70724&fc=1

[winston]

Insurer sets out IPO terms

by Janice Huang

ZhongAn Online P&C Insurance has set tentative terms for a Hong Kong initial public offering that could raise as much as US$1.5 billion (HK$11.7 billion), people with knowledge of the matter said, as it pursues the city's first major fintech listing.

The company, backed by billionaire Jack Ma Yun, plans to sell shares at HK$53.70 to HK$59.70 apiece, the people said. Shanghai-based ZhongAn is seeking a valuation of as much as US$11 billion.

SoftBank Vision Fund has been discussing buying US$400 million to US$500 million of ZhongAn stock as a cornerstone investor in the IPO. ZhongAn aims to start taking investor orders on September 18.

JPMorgan Chase, Credit Suisse UBS and CMB International Capital are joint sponsors.

Source: The Standard

[winston]

not vested

ZA ONLINE(6060)

Analysis：

ZhongAn Online Property Insurance Co., Ltd. was inaugurated on November 6, 2013.

It was initiated and established by well-known companies such as Ant Financial, Tencent and Ping An.

As the world`s first Internet insurance company, ZhongAn is also a financial technology company that drives financial development with technological innovation.

ZhongAn Insurance is headquartered in Shanghai, China, and does not have any branches.

It provides online underwriting and claims services entirely through the Internet.

Recently, the company issued a profit alert. It is expected that it will turn losses into profits in the twelve months ending December 31, 2020.

This is mainly due to the company`s insistence on pursuing quality growth.

While achieving steady growth in total premiums, the overall cost The rate further improved, and the underwriting loss was correspondingly narrowed substantially.

Strategy：
Buy-in Price: $55.00, Target Price: $78.00, Cut Loss Price: $40.00

Source: Phillips