BEIJING: Evergrande Real Estate Group Ltd, one of China’s largest property development companies, has launched an ambitious plan to expand into the insurance sector, after taking a half stake in a joint-venture insurer.
Evergrande Nanchang, an indirect wholly owned subsidiary, will pay $617 million for a 50 percent stake in Great Eastern Life Assurance (China) Co Ltd – a Chongqing-based joint venture originally formed between the city’s government and Singapore, which offers life, health and accident cover.
Zhao Dongmei, who will chair the life insurance business, said Evergrande’s high-profile brand and large number of customers created a solid foundation for business growth, setting a target of more than 100 billion yuan in business by the end of 2018.
Evergrande’s shares opened at HK$6.43 (82 cents) on Monday, and ended the day 5.1 percent up at HK$6.79.
Reuters reported that Evergrande will promote the insurance services in its more than 300 new housing developments. It said Evergrande will buy the shares held by the Chongqing City Construction Investment (Group) Co Ltd and the Chongqing Land Group.
The Chongqing Casin Group Co Ltd and Great Eastern Life Assurance will each retain their 25 percent holdings.
Based in Guangzhou, the capital of Guangdong province, Evergrande has tapped into other sectors including bottled water, sports, medicine and culture.
Its move into insurance created controversies over the weekend, however, during the second leg of the AFC Champions League match between its own Chinese Super League team Guangzhou Evergrande Taobao FC and United Arab Emirates’ Al Ahili, with the Guangzhou players wearing shirts bearing the Evergrande Life Insurance name.
The Chinese club is currently sponsored by car manufacturer Dongfeng Nissan, in a deal worth 100 million yuan, which was due to run until January.
In a statement issued shortly after the game on Saturday, Dongfeng Nissan said the club had violated the deal with players taking to the field without its branding, and demanded a public explanation from Evergrande.
The Guangzhou club insisted on Monday that it had been in contact with Dongfeng Nissan after the game, to explain the move, according to Chinese news portal qq.com.
