Financial Services Association, Feb. 19 (Reporter Xia Shuyuan) After delaying the listing of FWD Group (FWD Group), an insurance company owned by PCCW (00008.HK) Chairman Li Zekai, it was reported last week that it was considering selling shares, with a valuation of over $10 billion.

In response, a spokesperson for Yingke Development Group's latest response did not comment on any speculation in the market, but specifically stated: “Li Zekai will continue to maintain his controlling interest in FW and has firm confidence in FW's long-term development.”

Yingke Development emphasized that under any circumstances, FW Insurance must comprehensively consider the timing of listing, as well as the market environment. If there is no predictable good situation, an urgent listing will affect the company's market capitalization performance, and the gains outweigh the losses.

According to a spokesperson for Yingke Development Group, since Li Zekai joined FW Insurance, the company's business has expanded from the initial 3 markets to 10 markets, and the average annual growth in new business over the past 10 years has exceeded 23%. The company said that FW Insurance's business continues to grow at a high rate, providing multiple options for future development. The company reiterated, “Of course, listing is an option for the company's development, but it will also seek the right time to guarantee shareholders' rights and interests to the greatest extent possible.”

Yingke Development responds to FW Insurance's share sale, saying Li Chak-kai will continue to maintain his controlling interest

The news of the sale of FW Insurance's shares once again pushed Hong Kong's business celebrity Li Chak-kai to the front desk.

According to reports, after Fuwei Group, an insurance company owned by PCCW Chairman Li Zekai, delayed listing, FW is considering potential transaction options such as selling shares, and the company's valuation may exceed 10 billion US dollars.

According to people familiar with the matter, multinational insurance companies, including Sun Ming Financial, have already contacted Fuwei to express interest in cooperation. “Although negotiations between FW and Sun Ming Finance were hampered by price issues, other insurance companies hoping to expand their business in Southeast Asia and Hong Kong have also initially expressed interest in potential transactions.” The person mentioned above said.

In response to the rumor about the sale of FW Insurance's shares, on February 18, a spokesperson for the Yingke Development Group said that as its largest insurance company, FWD Insurance has expanded from the initial 3 markets to 10 markets in the past 10 years, and has become the fastest growing life insurance company in the Pan-Asian region.

It is worth mentioning that over the past 10 years, FWD's average annual new business value has increased by more than 23%. The Group learned that the listing progress of FW Insurance has also attracted market attention. The group believes that under any circumstances, FW should comprehensively consider the timing of listing, as well as the market environment. If there is no predictable good situation, an urgent listing will affect the company's market capitalization performance, and the gains outweigh the losses.

A spokesperson for Yingke Development Group said that in recent years, FW Insurance has performed well and has maintained high growth, which provides a variety of options for the company's future development. Its spokesperson stressed that listing is of course an option for the company's development, but it will also seek the right time to guarantee shareholders' interests to the greatest extent possible.

Regarding the rumor, a spokesperson for Sun Ming Finance also said that it has always been the practice not to comment on mergers and acquisitions speculations, and that the group is always looking for opportunities to expand its scale to achieve its medium-term financial goals.

Supercapital players quickly became a multinational insurance group in 10 years, and the industry expects FW not to submit another IPO application in the short term

The predecessor of FWD Insurance was ING's insurance business in Asia.

In 2012, Yingke Development Group, a subsidiary of Li Chak-kai, acquired ING's insurance business in Hong Kong, Macau and Thailand, and changed its name to Fuwei in 2013.

Since it was put into operation in 2014, Fuwei has rapidly expanded in many Asian markets over the past 10 years. The company currently operates in 10 markets, namely Hong Kong, China, Macau, China, Japan, Indonesia, the Philippines, Malaysia, Singapore, Vietnam, Thailand and Cambodia. In addition to relying on its own operating cash flow, FW's rapid rise also relied on bank loans, as well as medium-term notes and subordinated bonds issued by the company itself.

According to the prospectus, in 2019-2021, FW Insurance achieved revenue of US$6.232 billion, US$9.487 billion, and US$11.697 billion. Among them, net premium and fee revenue was US$5.127 billion, US$7.682 billion, and US$9.302 billion respectively, while net profit was US$332 million, -US$252 million and US$249 million, respectively. In 2022, FW Insurance recorded a net loss of US$740 million due to loss of return on investment due to capital market fluctuations.

In June 2021, FW Insurance submitted an IPO application for US stocks, but Hong Kong-based FW was blocked when it was approved by the US Securities and Exchange and was slow to go public. In March 2023, FW Insurance submitted an IPO application for the third time on the Hong Kong Stock Exchange. The market expected to raise about 1 billion US dollars. As a result, it abandoned its IPO target for that year due to fluctuating market conditions.

According to reports, while attending the “Hong Kong Financial Forum 2023” in November 2023, Ma Shiheng, said that only 61 IPOs were listed in Hong Kong back then, and fund-raising was reduced by 19% year on year. Even FW Group, which wanted to go public, was unsuccessful. Except because the Hong Kong listing was troublesome, it was also based on “the individual markets are too weak and we don't want to sell cheaply”, hoping that the Hong Kong Stock Exchange will simplify the listing process.

People familiar with the matter said that easing the debt burden is also one of the important reasons why FW is seeking a listing. According to reports, FW Insurance previously disclosed in the US stock prospectus that part of the capital raised from the listing will be used to repay debts.

It is expected that Fuwei Group will not re-submit a listing application in the short term. The new strategic investment may provide an exit opportunity for some long-term shareholders of FW. If the deal is successful, FW may use part of the capital to reduce debt while continuing to focus on improving sustainable profitability and growth.