Hong Kong company reporting season

Ping An Insurance profit beats expectations as new sales and technology development drive growth

China’s second-largest life insurer reports a 34 per cent rise in net profit for the first half of this year

PUBLISHED : Tuesday, 21 August, 2018, 6:03pm
UPDATED : Tuesday, 21 August, 2018, 11:09pm

Ping An Insurance (Group), China’s second-largest life insurer, reported a 34 per cent growth in net profit for the first half of this year, beating expectations thanks to increased sales of insurance products and improved efficiency from the development of new technologies.

Net profit for the January to June period stood at 58.095 billion yuan (US$8.49 billion), or 3.26 yuan per share, up from 43.43 billion yuan in the same period a year earlier, the company said in a stock exchange filing on Tuesday.

The figure was above the consensus forecast of a 26.3 per cent rise by analysts polled by Bloomberg.

However, the value of its new business – a major indicator of growth for insurance companies, was 38.75 billion yuan, little changed from 38.67 billion yuan a year earlier.

It will pay an interim dividend of 0.62 yuan per share, up 24 per cent from a year earlier, as well as a special dividend of 0.20 yuan per share to mark the 30th anniversary of its founding.

“In the first half of 2018, the government deepened financial reforms and urged insurers to focus on the protection function. Remaining true to our original aspiration, we boosted business value and results by promoting protection products,” founder and chairman Peter Ma Mingzhe said in the statement.

He said that profit from the life and health insurance business reached 34.33 billion yuan, up 44.2 per cent year on year.

Ping An has focused heavily on new technology, and has been spending 1 per cent of its annual revenue, or a total of around US$1 billion a year, on internet and other technologies.

“As at 30 June 2018, our technology patent applications had increased to 6,121, up by about 100 per cent. We have four core technologies, namely AI-based cognition, AI, blockchain, and cloud computing,” Ma said.

“We have applied them to scenarios such as customer development, channel management, customer services and risk management to cut costs, boost efficiency, enhance risk control, optimise the customer experience and sharpen the competitiveness of our core financial businesses,” he said.

The number of online customers increased 20.6 per cent year on year to 486 million. On average, each online user used 2.3 services, up 12.7 per cent year on year, the company said.

Ping An Good Doctor to expand medical services platform in Southeast Asia this year

Ping An has also invested in start-ups and has raised four unicorns – companies with valuations over US$1 billion. Of the four, it spun off Ping An Good Doctor, officially known as Ping An Healthcare and Technology, in April. The company is China’s biggest online health care platform, and raised US$1.1 billion from the most sought-after initial public offering in Hong Kong since 2009, with the retail tranche of the offer oversubscribed by 654 times.

The others are internet lending and wealth management platform Lujiazui International Financial Asset Exchange, or Lufax, medical health management company Ping An Healthcare Technology and online finance site OneConnect.

Lufax had 36.84 million registered users on its platform as of the end of June, up 18 per cent from a year earlier. Loans under management by the platform stood at 313.747 billion yuan, up 8.8 per cent from a year earlier, Ping An said.

Ping An shares closed at HK$70.35 before the results announcement, up 1.44 per cent from Monday.