(Yicai) July 16 -- Shares of Ping An Insurance Group fell after China's biggest insurer said it intends to issue USD3.5 billion of convertible bonds in Hong Kong to fund its business development.

Ping An’s mainland-listed equity [SHA: 601318] dropped as much as 4.4 percent intraday to CNY40.68 (USD5.60) as of 2.15 p.m. whereas in Hong Kong, its shares [HKG: 2318] slipped as much as 5.8 percent to HKD33.95 (USD4.40).

Bonds that can be converted into stock will be issued to professional investors with an annual interest rate of 0.875 percent to raise capital for Ping An’s needs to develop its financial business, as well as emerging services in medical care and pension, the Shanghai-based insurer said yesterday. The notes will mature on July 22, 2029.

After the issuance, the bonds will be accessible to retail investors via the Hong Kong Stock Exchange. Investors can convert them into shares at a price of HKD43.71 apiece under specified conditions. If the issuance was fully converted into stock, it would account for 3.4 percent of Ping An’s current total share capital.

Affected by macroeconomic conditions and volatility in the capital market, Ping An’s net profit plunged by 23 percent to CNY85.7 billion (USD11.8 billion) last year from 2022 on a 4 percent increase in revenue to CNY913.8 billion (USD125.7 billion). In the first quarter of this year, net profit slid by 4 percent to CNY36.7 billion and revenue fell 3 percent to CNY245.6 billion, according to the latest earnings report.

Ping An is seeking new growth points in medical and elderly care. To this end, the firm had teamed up with more than 36,000 hospitals, over 100,000 health management institutions, and 231,000 pharmacies across the country as of March 31.

Editor: Emmi Laine