China Life IPO top of range likely 24 yuan

KatherineNgandagencies

Saturday, December 23, 2006

China Life Insurance (2628), the first insurer to plan a listing in the mainland, has finished its price consultation and expects to set the range between 20 yuan and 24 yuan (HK$19.88 and HK$23.86) a share, fund managers said.

"The company does not want to set the price range too high, which will limit the upside potential for its A-share debut, but the H-share jump this week has taken the lead and [pricing] is no longer decided according to the management's will," said a fund manager.

Since the offering consultation started Monday, the price of China Life's H shares has risen about 18.2 percent, closing at HK$24.35 Friday. China Life jumped another 3.84 percent Friday, with 69.67 million shares worth HK$1.67 billion changing hands.

A report of a price range of 24 to 30 yuan per share being set fueled trading in its H shares.

"It was just the share value forecast by the company's sponsor China International Capital Corporation," said a market source.

Market expectations of the price range varied from 18 to 24 yuan per share, making an average price about 22 yuan, around a 10 percent discount to its H-share closing price Friday, said mainland sources.

"China Life really is a good story to tell that attracts lots of fund managers' attention," said a fund manager who attended Friday's presentation in Beijing.

"But I will only subscribe to the shares with a price set less than 24 yuan per share, otherwise it would be unreasonably expensive."

The official China Securities Journal quoted a report by Ping An Securities as forecasting the IPO price would be set at 18.70 to 20.70 yuan, and that the stock would list in Shanghai between 21.50 and 23.50 yuan.

China's largest life insurer will start its A-share initial public offering roadshow Monday and Tuesday, with the price set Tuesday. The shares will be listed no later than January 11.