Richard Li's FWD keeps 'close eye' on market amid rumours insurer will refile for IPO

Insurer FWD Group Holdings said it is keeping "a close eye" on market conditions amid speculation that its owner, the tycoon Richard Li Tzar-kai, wants to revive his plan to raise capital through an initial public offering in Hong Kong.

A stock sale by FWD, which has postponed its Hong Kong IPO twice after an about-turn from New York in 2021, may value the 11-year-old insurer at as much as US$9 billion, according to a Reuters report.

"While we do not currently have an active listing application and no decisions have been made to refile at this stage, of course we continue to keep a close eye on capital market developments and conditions," the company said in a statement to the Post.

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FWD has always wanted to conduct an IPO and is now making preparations to refile, according to a source familiar with the matter.

The preparation work is likely to take some time, the source told the Post.

Richard Li Tzar-kai, the younger son of the city's wealthiest man, Li Ka-shing, is the owner of FWD Group. Photo: Edmond So alt=Richard Li Tzar-kai, the younger son of the city's wealthiest man, Li Ka-shing, is the owner of FWD Group. Photo: Edmond So>

FWD first filed a listing application to the Hong Kong stock exchange in February 2022 but decided to postpone it three months later because of market volatility. It refiled in March last year but once again shelved the plan, in September, due to market uncertainties.

The Hong Kong-based insurance company had already abandoned a plan to list in New York in 2021 amid US-China tensions that persist to this day. It had aimed to raise up to US$3 billion with that flotation in September 2021, which would have valued the company at US$13 billion.

Founded in 2013, FWD has expanded to 10 markets across Asia including Cambodia, Japan, Indonesia and Singapore. It has more than 13 million customers with total premiums worth US$6.4 billion in 2023.

It raised a total of US$1.82 billion through private placements in 2021 and 2022 to support growth plans, a company spokesman said. Investors included global and regional institutions such as Apollo, the Canada Pension Plan Investment Board, the Li Ka Shing Foundation, Pacific Century Group and Swiss Re.

The speculation about the re-emergence of FWD's listing plan comes amid a pickup in Hong Kong's IPO market in recent weeks.

Retail investors have rushed to subscribe to the shares of QuantumPharm, an artificial intelligence (AI) drug researcher backed by Tencent Holdings, in the first three days of its HK$1.13 billion offering.

Between Tuesday and Thursday, the total margin lending of 12 local brokerages reached HK$2.22 billion (US$282.8 million), representing an oversubscription of 38 times the retail tranches offered, according to data from Futu Securities, which itself lent out HK$748 million for investors to subscribe to QuantumPharm.

The first IPO under Chapter 18C's new listing regime for a pre-revenue tech company will close its book on Friday.

The GEM, Hong Kong's secondary board, saw its first new listings in more than three years, as semiconductor-component maker UBoT Holding shot up as much as 36 per cent on its trading debut.

Legendary emerging markets fund manager Mark Mobius recently reversed his view on Chinese stocks. He believes the country's recent property support measures will restore investors' confidence.

In a media briefing last week, the 87-year-old fund manager said the country's equities were "beginning to look good now," a U-turn from his remarks in April when he said they "were not attractive" in a Bloomberg interview.

Since May, Beijing has introduced a slew of measures to rescue the floundering property market after the China Securities Regulatory Commission rolled out policies to support the capital markets, including encouraging more large mainland companies to list in Hong Kong.

The Hang Seng Index climbed as much as 31 per cent from a January low last month, while the CSI 300 Index that tracks stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange has rallied over 10 per cent as optimism at home grows.

"Market sentiment has turned more positive, and turnover has improved," said Katerine Kou, chairwoman of the Hong Kong Securities Association.

"Good quality companies and listing candidates with good growth prospects will be popular with investors.

"However, it is still too early to tell if the market bull run will last for long. If it does continue, it will help encourage more IPOs."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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