May 31, 2017 / 10:43 AM / 3 months ago

China's Zhong An aims to raise at least $1 billion in Hong Kong IPO - sources

HONG KONG (Reuters) - Zhong An Online Property and Casualty Insurance, China's first online-only insurer, has resumed a plan to raise $1 billion or more in a Hong Kong initial public offering (IPO) in the second half of this year, said two people with knowledge of the matter.

Zhong An, whose major shareholders include Tencent Holdings Ltd (0700.HK) and Alibaba Group Holding Ltd (BABA.N) affiliate Ant Financial, plans to apply for listing in the coming weeks, said one of the people, who declined to be identified as the matter is confidential.

The Shanghai-based insurer chose Credit Suisse, JPMorgan and UBS in October to lead the IPO, but later suspended the plan to explore a mainland listing.

The following February, Reuters reported that the mainland securities regulator was considering streamlining the IPO approval process for large domestic technology firms, such as Zhong An.

But lack of progress on the matter prompted Zhong An to opt for Hong Kong, though it would prefer to list in mainland China, one of the people said.

"Zhong An has always wanted to list at home but given an A-share IPO is unlikely in the short-term, the company has to come back to Hong Kong to go public and raise fresh capital to expand its business first," said the person, referring to a class of shares on the Shanghai and Shenzhen stock exchanges.

"A domestic listing later is certainly under consideration," the person told Reuters.

The China Securities Regulatory Commission (CSRC) has also appeared to slow its IPO process, with seven approvals last week versus a weekly average of 10 in recent months. As of Friday, applications to list in Shanghai or Shenzhen numbered about 600.

Zhong An and UBS declined to comment. Credit Suisse and JPMorgan did not respond to requests for comment.

HK COUP

A Zhong An IPO would be a coup for the Hong Kong stock exchange which has struggled to attract technology listings due to strict profitability and voting rights requirements, bourse Chief Executive Charles Li said this month.

Hong Kong famously lost out to New York on Alibaba's 2014 record IPO, sparking a broader debate about the bourse's listing rules.

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 (601318.SS) (2318.HK) Chairman Ma Mingzhe.

It offers more than 300 niche products, many of which are low-cost, including policies covering flight delays, cracked mobile phone screens and shipping costs for returning goods bought online.

Ant Financial and Ping An declined to comment. Tencent did not respond to requests for comment.

Reporting by Julie Zhu; Additional reporting by Elzio Barreto; Editing by Michelle Price and Christopher Cushing

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