Richard Li-Backed Insurer FWD Group Reattempts Hong Kong IPO
On March 13, FWD Group, the Hong Kong-based insurer backed by tycoon Richard Li Tzar-kai, resubmitted its application to be listed on the Hong Kong Stock Exchange. Co-sponsored by Morgan Stanley, Goldman Sachs, CMB International Capital, and JPMorgan Chase & Co, the company aims to raise $1 billion and anticipates going public in Q2 of this year.
Before this latest filing, FWD Group had submitted listing applications to the Hong Kong Stock Exchange on February 28 2022 and September 13 2022. In 2021, the company had planned to raise up to $3 billion through a listing in New York but shelved the plan due to ongoing tensions between the US and China.
FWD Group was established in 2013. Richard Li Tzar-kai holds approximately 76.69% of the voting rights through its wholly-owned entity PCGI Holdings. According to the prospectus, FWD Group has expanded to ten markets, including Hong Kong and Macau, Thailand and Cambodia, Japan, and the emerging markets of the Philippines, Indonesia, Singapore, Vietnam, and Malaysia. In 2022, these markets contributed 26.3%, 32.8%, 16.8%, and 24.1% respectively to the company’s revenue.
Global advisory and intermediary firm NMG reported that as of the end of 2021, FWD Group had over 9.8 million customers, 6,100 employees, and 33,000 insurance agents, with total assets amounting to $62.6 billion. In Southeast Asian markets, which include Thailand, Cambodia, Philippines, Indonesia, Singapore, Vietnam, and Malaysia, FWD Group held a market share of 4.7% in 2021, making it the fifth largest insurance company in the region.
Huynh Thanh Phong, Chief Executive Officer and Executive Director of FWD Group, noted that the company will celebrate its tenth anniversary in 2023. He also stated that with the significant security gap in Asia, the increasing demand for digital services, and the rising middle class, FWD Group is in a prime position to capitalize on emerging opportunities.
Although Li has publicly stated that the objective is to develop FWD Group into a world-class operating platform, the company’s main business has been experiencing losses for an extended period of time.
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As recorded in the prospectus, FWD Group’s total revenue for 2020, 2021, and 2022 amounted to $9.487 billion, $11.697 billion, and $8.25 billion, respectively. However, during the same period, the company incurred net profits or losses of -$252 million, $249 million, and -$740 million, respectively.
FWD Group announced last month that it had raised a total of $1.83 billion in private placements in 2021 and 2022 to support its growth plan. Investors in the placements included Apollo Global Management, Canadian Pension Plan Investment Board, Li Ka Shing Foundation, and Swiss Re.