PING AN(2318.HK):EXPECT $3.5BN CB DILUTIVE EFFECT TO BE SHORT-TERM
PING AN(2318.HK):EXPECT $3.5BN CB DILUTIVE EFFECT TO BE SHORT-TERM
The insurer announced the issuance of US$3.5bn convertible bonds (CB) to offshore professional investors outside the US on 15 Jul 2024, at 0.0875% par per annum due in Jul 2029. The proposed principal amount is within the range of an estimated US2bn-5bn, according to the Bloomberg news (link). Against the closing price on 15 Jul of HK$36.05, the initial conversion price of HK$43.71 implies a premium rate of 21.2% (Fig.1). Upon full conversion of the bonds, 625.2mn new H- shares will be issued, representing 8.39% of existing listed H-shares (7.45bn) and 3.43% of current share capital (18.21bn, Fig.2). We reckon the CBs' dilutive impact to be limited at roughly 3.43%, and the stock price fluctuation shall be short-term only, given 1) relatively low financing costs of raising the US$3.45bn net proceeds; 2) increased listed H-shares underpinning offshore liquidity; and 3) potential use of proceeds for capital injection into the Group's core business, such as Ping An Life, which is likely to boost the pro-forma life core solvency ratio in 1Q24 by 6.4pct to 125% (CMBI est.) assuming all capital injected and the minimum capital unchanged.
該保險公司於2024年7月15日向美國外的專業機構投資者發行了35億美元的可轉換債券（CB），票面利率爲0.0875%，到期日爲2029年7月。根據彭博新聞（鏈接），擬議中的本金金額介於20億至50億美元之間。根據股價於7月15日的收盤價36.05港元，初始轉換價格爲43.71港元，溢價率爲21.2%（圖1）。當債券完全轉換後，將發行625.2萬新的H股，佔已上市的H股（7.45億股）8.39%和現有股本（18.21億股）3.43%（圖2）。我們估計可轉債對股份稀釋的影響將僅限於大約3.43%，股價波動將僅是短期的，因爲1）籌集35億美元的淨收益的融資成本相對較低；2）增加的上市H股支撐離岸流動性；3）將募集資金用於集團的核心業務（如平安人壽）的潛在用途，有可能在1Q24將企業的進度生命核心充足率提高6.4個百分點至125％（招商銀行國際估計），假設注入了全部資本並且最低資本不變。
Increased H-share proportion + improved offshore liquidity. The CB scheme is convertible to 625.2mn new H-shares based on the initial conversion price at HK$43.71. Assuming full conversion of the bonds and no further share issuance, the total number of H-shares will increase to 8.07bn, accounting for 42.9% of the enlarged share capital of 18.84bn (vs now: 40.9%, Fig.2). On 16 Jul, the insurer announced the proposal of cancellation on 102.6mn A-shares repurchased from 27 Aug 2021 to 26 Aug 2022, partially offsetting the dilutive effect of future shares conversion and raising the H-share proportion to 43.1% (Fig.2, CMBI est). We reckon the dilutive equity impact of CB sales to be 3.43%.
增加H股比例+提高離岸流動性。轉債計劃基於初始轉換價格43.71港元，可轉換爲625.2萬新的H股。在債券完全轉換和不再發行股票的情況下，H股總數將增至8.07億股，佔擴大後的股本18.84億股的42.9%（相對現在的40.9%）（圖2）。7月16日，該保險公司宣佈從2021年8月27日至2022年8月26日回購102.6萬A股，並提議註銷，部分抵消未來股票轉換的稀釋效應，並將H股比例提高至43.1%（圖2，招商銀行國際估計）。我們估計可轉債銷售的股權稀釋影響爲3.43%。
Potential use of proceeds to boost the core solvency of Ping An Life. Under CROSS-II, the issuance of capital supplementary bonds can only boost tier-1 supplementary capital, transferring to a pick-up in comprehensive solvency ratio yet leaving the core solvency intact. In 1Q24, Ping An Life's core solvency ratio was 118.8%, slightly beating industry average of 113.5% and ranking the second lowest among listed life peers (Fig.7). We believe the potential capital injection from the Group to Life and/or P&C subsidiaries is possible, given the fact that the Group's increasing stakes in subsidiaries can be counted into core capital, and thus enhance the entity's core solvency ratio. We estimate the pro-forma 1Q24 life core solvency ratio to rise by 6.4pct to 125.2%, assuming all proceeds are injected and the minimum capital remains unchanged at RMB389.4mn (Fig.4).
利用收益提高平安人壽的核心充足率。根據CROSS-II，資本補充債券的發行只能提高一級補充資本，從而轉化爲綜合充足率的提高，但不影響核心充足率。1Q24，平安人壽的核心充足率爲118.8%，略超行業平均值113.5%，在上市壽險公司中排名第二低（圖7）。我們相信，集團向人壽和/或財產險子公司注入資本的可能性存在，因爲集團對子公司的持股比例增加可以計入核心資本，並提高實體的核心充足率。我們估計，如果注入全部收益並將最低資本保持不變（人民幣3,894萬，圖4），1Q24生命核心充足率將上升6.4個百分點至125.2%。
Valuation: The stock is trading at FY24E 0.48x P/EV and 0.70x P/B, implying a dividend yield of 8.0% and FY24E ROE at 13.2%. The stock price dipped 5.41% on 16 Jul after the CB announcement. We expect the fluctuation to be short-term, given limited equity dilutive impact and potential use of proceeds for capital injection to core subsidiaries, i.e. Ping An Life, with relatively low financing costs. We maintain BUY with TP unchanged at HK$52.0, implying FY24E 1.0x P/EV.
估值：該股票以FY24E 0.48x P/EV和0.70x P/B進行交易，意味着股息率爲8.0％，FY24E ROE爲13.2％。Cb宣佈後，股價於7月16日下跌5.41％。考慮到股權稀釋影響有限以及將可獲得的資金用於向核心子公司注資（例如平安人壽）並降低融資成本，我們認爲波動將是短期的。我們維持買入，目標價不變，爲HK$52.0，FY24E 1.0x P/EV。
譯文內容由第三人軟體翻譯。