On July 16th, Goldman Sachs released a report stating that Ping An Insurance is looking to raise $3.5 billion through the issuance of convertible bonds. The report believes that this issuance may not be as large as Ping An's annual dividend, and potential dilution impact is estimated to be limited. The bank maintains its "buy" rating and a target price of 55 yuan. According to yesterday's (15th) closing price and assuming a conversion premium in the range of 25% to 30%, the potential dilution impact is expected to be about 2%. In addition, Goldman Sachs points out that the CB coupon rate is between 0.375% and 0.875%, which is similar to the CB coupon rates issued by Alibaba, JD.com, and Ctrip. For Ping An, this is low-cost financing. Furthermore, Goldman Sachs believes that the size of Ping An's CB issuance this time is appropriate. Ping An intends to use the net proceeds from this fundraising for further development of core business, enhancing capital strength, and supporting the group's new strategic initiatives in the medical and retirement sectors.
大行评级｜高盛：中国平安发CB可提供低成本融资 潜在摊薄影响有限
Goldman Sachs: Ping An Insurance can provide low-cost financing through CB issuance, with limited potential dilution impact.
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