Huakang Financial On the Track to IPO

The Guangzhou-based insurance agency Huakang Financial is in tutorship period for an initial public offering, said an insider.

Following Chinese insurance agency and broker CNinsure's debut on the NASDAQ stock exchange on October 31, 2007, many insurance intermediary companies are attempting to become the second listed.

Statistics released by China Insurance Regulatory Commission show that the domestic insurance companies obtained CNY 402.743 billion premiums through insurance intermediary channels as at March 31, 2011, up 7.4% year on year. These accounted for 87.23% of total premiums. Insurance intermediaries got CNY 32.546 billion revenues in the first quarter of 2011, up 7.98% year on year.

First-quarter premiums obtained through insurance agencies rose by 24.85% year on year to CNY 13.526 billion. Insurance agencies got CNY 1.852 billion commissions, up 34.59% year on year. But insurance agencies' first-quarter net profit shrank 29.09% to CNY 39 million. Rises in sales expenses and labor force cost may the major reason for the decline.

Huakang Finance ranked No.1 among insurance agencies by CNY 123.54 million revenue in the first quarter. It has been taking the first place since the first quarter of 2010.