FAST NEWS: Investors Unsure as Sunshine Insurance Makes Trading Debut

The latest: Sunshine Insurance Group Co. Ltd. (6963.HK) made its trading debut in Hong Kong on Friday, becoming the first new Chinese insurer to go public in four years. Its shares opened at HK$5.83, unchanged from the IPO price.

Looking up: The international portion of the listing, which was set to account for 90% of the IPO’s 1.15 billion shares sold, was oversubscribed by 34%.

Take Note: Market response to the local portion of the offering was chilly, with only 13% of shares on offer subscribed. That caused the stock to price at the bottom of its IPO range at HK$5.83, with the 101 million unsubscribed shares reallocated to the international portion of the offering.

Digging Deeper: Sunshine was established in 2005 and initially started as a property and casualty insurer before expanding into life and personal insurance two years later. In early 2008, it was renamed as Sunshine Insurance Group. The company was China’s 12th biggest life and seventh biggest property insurer in 2020, according to data published by China’s banking and insurance regulator that year. Its IPO valuation of approximately HK$6.7 billion ($860 million) is lower than our previous estimate of $2.07 billion, likely reflecting the company’s desire to price itself more conservatively due to recent market volatility.

Market Reaction: Sunshine Insurance’s shares declined during the Friday morning session, closing at HK$5.62 by the midday break, down 3.6% from the IPO price.

Translation by Jony Ho

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