HONG KONG -- Ping An Insurance Group plans to list a health care and medical services unit in Hong Kong in what could be the first of several such offerings as the Chinese conglomerate looks to give its largest subsidiaries room to grow outside its shadow.
The insurance giant has applied to spin off and list Ping An Healthcare and Technology, eyeing a debut as early as the April-June quarter. Ping An could raise 8 billion Hong Kong dollars ($1.02 billion) from the initial public offering, by some estimates.
Ping An Healthcare operates Ping An Good Doctor, a platform that lets users consult with a network of some 60,000 doctors across China via a smartphone app and book appointments at a nearby medical facility if necessary. The service has nearly 200 million registered users, finding a receptive audience in a country where patients often face long waits at hospitals. The SoftBank Vision Fund run by Japan's SoftBank Group bought into Ping An Healthcare last year.
Jonathan Larsen, chief innovation officer at Ping An Insurance, told the Nikkei Asian Review in a recent interview that he hopes to see the insurance group's major subsidiaries go public. "The dynamics of those businesses would not be fully appreciated as subsidiaries of a big company like Ping An," he argued. "It's much better for them to be valued on a stand-alone basis."
While Larsen acknowledged that these units are at "very different" stages of development, he said he would like to see IPOs for "Lufax and possibly other operations over time." Lufax, officially Shanghai Lujiazui International Financial Asset Exchange, is a fast-growing online wealth management platform.
Taking subsidiaries public would not only give them more room to grow, but also benefit the parent financially, Larsen stressed. "One argument is about value maximization, [and] the other is capital rationing within Ping An," he said. "Being able to access external capital allows us to do more things on more fronts and deploy our resources efficiently."
Ping An shares edged down 0.5% to HK$90.20 in Hong Kong on Tuesday, but still outperformed the benchmark Hang Seng Index, which sank just over 1%. The insurance company's Shanghai-listed shares ended the day little changed at 73.38 yuan, while the benchmark Shanghai Composite Index fell about 1%.