Capital raised from Ping An Insurance's upcoming $22 billion A-share sale will be injected into the group's subsidiaries for expansion efforts over the next five to 10 years.

Ping An Insurance Chairman Ma Mingzhe told reporters yesterday that the group hasn't come up with a concrete timeline for the release of the new A-shares.

Stakeholders of the mainland insurance giant voted earlier this month in favor of the company's proposal to unleash an additional 1.2 billion shares into the volatile A-share market. Some criticized this move as irresponsible, worrying that the current bumpy mainland market might be overwhelmed by such a large-scale capital-raising venture.

"When it comes to determining the timetable, among our considerations will be market conditions, such as its ability to digest such an offering," Ma said yesterday while speaking to reporters via video conference about the company's annual results.

The chairman said most of the capital raised will trickle down to the group's nine subsidiary companies for future expansion purposes. The rest will be used to invest in projects approved by regulators.

He added that compared with its counterparts, Ping An's capital ratio is relatively low. Therefore, he said that raising additional resources is crucial for the future development and expansion of the group's core businesses.

Although Ping An posted rosy results in 2007 with net profits surging 140 percent, its share price fell more than 6 percent yesterday.

Analysts said Ping An's reliance on A-share market investments as a major income driver last year may be problematic for the profitability of the company in 2008.

"Everyone knows that the A-share market will not perform as well as it did in 2007," said Linus Yip, a strategist with First Shanghai Securities. "It is apparent that they will have a very difficult time sustaining the same level of profits."

Ping An reaped a net investment income of 15.3 billion yuan in 2007, while net profits for the company stood at 19 billion yuan.

Yip said that despite Ping An's move to tap into overseas markets by acquiring 50 percent of Fortis Investments, it is not foreseeable that the venture will be able to generate any meaningful profits for the company in the near term.

Ping An shares slipped HK$3.25, to close at HK$49.90 yesterday.

Looking ahead, Ma said the group will continue to focus on strengthening its three pillar business models - insurance, wealth management and banking.

When asked whether Ping An has more merger and acquisition plans in the pipeline, Executive Director Louis Cheung said they are always open to good opportunities. However, he said they will remain cautious in making any future purchases, and will have to ensure that there is good synergy.

(HK Edition 03/21/2008 page2)