Headquartered in Shenzhen, China, Ping An Insurance (also known as ‘Ping An of China’) is one of the world’s largest insurance and technology-powered retail financial services companies. It operates through five segments: Insurance, Banking, Trust, Securities, Other Asset Management, Technology, and Others.
Ping An stock is listed on the Shanghai and Hong Kong stock exchanges (SHA: 601318, HKG: 2318), while its American Depository Receipts (OTCMKTS: PNGAY) are sold over-the-counter in the United States.
Ping An Insurance ADR slumped 25.3% over the past year.
With more than 218 million retail users and 598 million internet customers, Ping An Insurance is one of the most valuable brands globally. The company was ranked #16 in the 2021 Fortune Global 500 list. Moreover, the leading brand valuation consultancy firm Brand Finance named Ping An of China as the world’s most valuable insurance company in the world for the sixth consecutive year on January 31, 2022.
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Impressive Growth
Ping An was established in 1988 as the first joint-stock insurance company based in China. It is one of the most valuable brands globally than three decades later. In addition, since its IPO in 2004, the company has delivered stable shareholder returns.
Ping An’s shareholders’ equity has grown at a CAGR of 22.9% as of fiscal 2020, since its IPO, while its EPS improved at a 23.4% CAGR over this period. Moreover, the company’s total assets increased at a 25.1% CAGR since 2004 (as of FY2020). Its embedded value rose at a 25% CAGR since its public listing.
Sustainable Operations
Ping An aims to achieve carbon neutrality by 2030, three decades before China’s 2060 net-zero emissions goal. Last year, the company enhanced its focus on green finance and sustainable development by launching its Green Finance+ plan, with investment and credit of RMB400 billion and total green insurance premiums of RMB250 million. The five-prong strategy is focused on streamlining Ping An of China’s operations in five aspects – green insurance, green assets, green technology, green operations, and green charity.
Ping An’s commitment to sustainability has been lauded by the ESG community. It was featured in the S&P Global Sustainability Yearbook 2022, being one of the five mainland Chinese companies on the list. With an ISS Governance QualityScore of 2, Ping An also won the Hong Kong Corporate Governance Excellence Award 2021 for the sixth time.
Impact of China’s regulatory crackdown on Ping An stock
China’s monumental crackdown on technology industry leaders has harmed Ping An. The China Banking and Insurance Regulatory Commission had ordered fintech and insurance companies to cease their improper marketing and pricing practices while improving their privacy protection features. Also, the CBIRC ordered the fintech giant to stop selling alternative investment assets, according to a recent Reuters report.
In the wake of operational uncertainties, the company’s net profit slumped in the fiscal third quarter ended September 30, 2021. Moreover, Ping An was affected by the heavily indebted Chinese property market, given the company’s sizable investments in domestic real estate.
Despite the macroeconomic headwinds and regulatory crackdown, Ping An is expected to maintain its position as a leading fintech and online insurance company globally.
Thus, the recent dip could be an ideal opportunity to invest in Ping An stock.