China Life Insurance, mainland China's largest underwriter with approximately 50% market share will list on the Shanghai Stock Exchange by January 11, at between 18.16 yuan to 18.88 yuan per share, valuing its IPO at 28.32 billion yuan (US$3.6 billion). Its mainland offering is a 29%-34% discount to its Hong Kong listed shares, reportedly in order for the listing to be accessible to mainland investors and have room to move to the upside. It will be the first mainland insurer to list domestically. In a statement, China Life said its proposed listing price values it at 94.1x-97.8x its 2005 earnings. Bloomberg reports China Life is the world's sixth most expensive life insurance company based on a book value of 7.32 (12/22 Hong Kong close). However, investors have not been turned off by rising valuation as its Hong Kong listed shares have more than tripled year-to-date making it the best performing Hang Seng Index stock. China Life's P/E is around 38-39 based on estimated 2007 earnings of 0.48 yuan/share.
• Sources: Bloomberg, The Wall Street Journal
• Related commentary: Chinese Blue Chips Soar to the Stratosphere, Investing in China: Rapid GDP Growth Rates Indicate Prosperous Future
• Potentially impacted stocks and ETFs: China Life Insurance (NYSE:LFC). ETFs: China Fund (NYSE:CHN), Greater China (NYSE:GCH), iShares FTSE/Xinhua China 25 Index (NYSEARCA:FXI), Jardine Fleming China Region (NYSE:JFC), PowerShares Gldn Dragon Halter USX China (NASDAQ:PGJ)
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