Morningstar

Ping An Insurance (Group) Co. of China Ltd Class H 02318

Morningstar Rating
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Stock XHKG Rating as of
HK$47.75 +2.20 (4.83%)
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As of Delayed Price Open

Company Report

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Ping An Insurance Earnings: New Business Growth Slows but Operating Profit Rebounds

Iris Tan

We retain our fair value estimate for Ping An Insurance at HKD 59 per H share after the company’s broadly in-line 7% year-on-year growth in interim net profit on a 57% increase in investment return thanks to better stock market performance. Though the 11% year-on-year new business value, or VNB, growth was softer than our expected 13%, we believe the stabilizing agent headcount and low base in the second half of 2023 should translate to respective full-year forecast 20% and 34% growth in VNB and net profit in 2024. The stock remains undervalued, trading at 0.5 times 2024 price to embedded value. Among Chinese insurers, we like Ping An and China Pacific Insurance, best for above-peer VNB growth and lower-than-peer policy costs. Offering over 7% dividend yield, we believe Ping An remains an attractive dividend play.

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Price vs Fair Value

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02318 is trading at a 135% premium.
Price
HK$45.55
Fair Value
HK$83.00
Uncertainty
High
1-Star Price
HK$58.54
5-Star Price
HK$21.80
Economic Moat
Vjzw
Capital Allocation
Wgzwymrc

Bulls Say, Bears Say

Bulls

The regulatory cut to bancassurance commission rate has benefited large insurers such as Ping An, with about 75% of bancassurance sales being generated from its banking subsidiary and a strong product pipeline.

Bears

Frequent top management turnover posts more temporary headwinds to its ongoing business restructuring.

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News

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Trading Information

Previous Close Price
HK$45.55
Day Range
HK$47.25–48.35
52-Week Range
HK$29.55–48.35
Bid/Ask
HK$47.75 / HK$47.80
Market Cap
HK$869.54 Bil
Volume/Avg
41.2 Mil / 47.8 Mil

Key Statistics

Price/Earnings (Normalized)
8.34
Price/Sales
0.93
Dividend Yield (Trailing)
5.86%
Dividend Yield (Forward)
5.86%
Total Yield
5.86%

Company Profile

Founded in 1988, Ping An Insurance is an integrated financial service provider headquartered in Shenzhen. The company has a focus on the offerings of healthcare services and integrated financial products. Ping An is China's second-largest life and P&C insurer. The company strives for an integrated financial services platform comprising life insurance, P&C insurance, banking, other financial services, and technology. These business segments contributed 89%, 8%, 23%, -18%, and 2% of the company’s operating profits, respectively, in 2023.
Sector
Financial Services
Industry
Insurance - Life
Stock Style Box
Large Value
Total Number of Employees
288,751
Website
https://www.pingan.cn

Competitors

Valuation

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Metric
02318
601628
01299
Price/Earnings (Normalized)
 8.3446.7717.81
Price/Book Value
 0.832.252.28
Price/Sales
 0.932.174.94
Price/Cash Flow
 1.512.69—
Price/Earnings
02318
601628
01299

Financial Strength

Metric
02318
601628
01299
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 1.02—12.10
Quick Ratio
No chart available

Profitability

Metric
02318
601628
01299
Return on Assets (Normalized)
 0.98%0.95%2.23%
Return on Equity (Normalized)
 12.58%12.06%15.38%
Return on Invested Capital (Normalized)
 7.94%5.76%12.10%
Return on Assets
02318
601628
01299

Insurance - Life Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
China Life Insurance Co Ltd Class H
CILJF
—Dtbht$129.5 Bil
 Ping An Insurance (Group) Co. of China Ltd Class H
PIAIF
KgwmcktwLrk$120.7 Bil
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PNGAY
—Gjfp$120.7 Bil
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MET
XlgxrvdrPgx$57.1 Bil
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JpvchbhfVvfn$23.2 Bil

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