SoftBank Vision Fund, an investment fund backed by Japanese telecommunications giant SoftBank is looking at making a US$500 million investment in ZhongAn Online Property and Casualty Insurance’s Hong Kong IPO.
ZhongAn was established in 2013 by mainland Chinese heavyweights Alibaba Group, Tencent Holdings, and
Ping An Insurance. The firm, valued at around US$1 billion, aims to raise up to US$1.5 billion in a Hong Kong IPO pegged to launch as early as September 18.
SoftBank Vision Fund, which is worth around US$93 billion, counts among its investors S audi Arabia’s Public Investment Fund, Mubadala Investment Company of the United Arab Emirates, Apple Inc., Foxconn Technology Group, Qualcomm Inc., and Sharp Corp., according to China Money Network. Its planned investment of US$500 million is almost a third of the IPO’s value, making it a potential cornerstone investor.
Ant Financial, Alibaba Group’s financial services arm, is the largest shareholder in ZhongAn at 16%, meanwhile, Internet services powerhouse Tencent and world’s most valuable insurer Ping An each have 12%.
Having two of the largest Chinese tech companies and a world-leading insurer behind it, ZhongAn was able to turn a profit in its second year in business. It sold health insurance, travel insurance, motor insurance, and insurance for products bought on Alibaba’s e-commerce platform. Many of the consumers were existing users of the three shareholders, creating a synergistic effect between their businesses.
According to ZhongAn’s IPO prospectus, the online insurer recorded net profits of RMB37 million (US$5.66 million), RMB44 million (US$6.73 million), and RMB9 million (US$1.38) from 2014 to 2016.
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