Insurance firms aim for more listings
Updated: 2007-12-07 16:20
Driven by strong growth potential, Chinese insurance intermediary companies are striving to expand their listings to satisfy the hunger for capital.
Chinese insurance agency and brokerage CNinsure made its debut on the NASDAQ stock exchange on October 31. The firm became one of the best first-day performers among Chinese initial public offerings (IPOs) on US stock exchanges this year.
American Depositary Shares of CNinsure Inc closed at $25.29 - up 58 percent a day after its IPO priced above expectation and raised $188 million.
Experts said CNInsure's popularity with investors is because of the company's strong revenue growth and the industry's huge growth potential.
The company's revenue rose 41 percent to 246.5 million yuan in 2006 from 143.7 million yuan a year earlier, according to its filing with the US Securities and Exchange Commission. Net income was 57.3 million yuan in 2006 versus a loss of 6.7 million yuan in 2005.
According to Huang Huaming, an analyst with CITIC Securities, the biggest challenge facing Chinese insurance intermediary companies is their profitability capabilities. Because the industry is still in an emerging stage, competition remains fierce.
The China Insurance Regulatory Commission's latest statistics show that by the end of September, there were 2,297 professional insurance intermediary companies, 41 more than in the second quarter. Insurance intermediaries usually include insurance agents, insurance brokers and loss adjusters.
Around 429 billion yuan in premiums was earned through intermediary companies during the January-September period of this year, accounting for 80.49 percent of the overall premiums. That proportion is 2.73 percentage points higher than the same period of last year.
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