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MarketScreener Homepage  >  Equities  >  Hong Kong Stock Exchange  >  Ping An Insurance (Group) Company of China, Ltd.    2318   CNE1000003X6

PING AN INSURANCE (GROUP) COMPANY OF CHINA, LTD.

(2318)
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Ping An Insurance of China : Announcement of Unaudited Results for the Nine Months Ended September 30, 2020

10/27/2020 | 03:50am EST

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Ping An Insurance (Group) Company of China, Ltd.

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2318)

ANNOUNCEMENT OF UNAUDITED RESULTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

The board of directors (the "Board of Directors") of Ping An Insurance (Group) Company of China, Ltd. ("Ping An" or the "Company") announces the unaudited results (the "Third Quarter Results") of the Company and its subsidiaries (the "Group") for the nine months ended September 30, 2020 (the "Reporting Period"). The Board of Directors and its Audit and Risk Management Committee have reviewed the Third Quarter Results.

1. KEY BUSINESS PERFORMANCE

1.1 Business Highlights

  • Ping An achieved steady business results. In the first nine months of 2020, operating profit attributable to shareholders of the parent company rose by 4.5% year on year to RMB108,692 million, culminating in a 20.9% annualized operating ROE.
  • Retail customer development continued to yield strong results. As of September 30, 2020, retail customers increased by 7.0% from the beginning of 2020 to over 214 million. Contracts per customer grew by 2.7% year to date to 2.71. In the first nine months of 2020, new customers increased by 2.5% year on year to 28.53 million.
  • Value contributions from corporate business cross-selling increased. Ping An continued to take a segmented approach to customer development, serving nationwide strategic customers, regional large customers, and small and micro-business customers. In the first nine months of 2020, the new financing scale achieved through corporate business cross-selling climbed by 149.8% year on year, and the written premium of the corporate channel achieved through cross-selling grew by 113.4% year on year.
  • The life and health insurance operating profit grew steadily. In the first nine months of 2020, operating profit after tax of the life and health insurance business rose by 9.2% year on year to RMB75,446 million. Amid post-epidemic challenges, the Company remained committed to upgrading business models and advancing Ping An Life's deep business reform.
  • The property and casualty insurance business grew steadily. Ping An Property & Casualty's premium income grew by 11.5% year on year to RMB219,490 million in the first nine months of 2020. As of September 30, 2020, as the largest automotive tool

1

app in China, the "Ping An Auto Owner" app had over 117 million registered users, up 26.5% from the beginning of 2020.

  • Ping An Bank maintained stable business operations and strengthened provisions. In the first nine months of 2020, operating income before impairment loss increased by 16.2% year on year to RMB83,313 million; net profit dropped by 5.2% year on year to RMB22,398 million, but declining at a slower pace compared with the first half of the year. As of September 30, 2020, the provision coverage ratio was 218.29%, up 35.17 pps from the beginning of 2020.
  • Ping An continued to develop its technological capabilities. As of September 30, 2020, Ping An's technology patent applications increased by 6,654 year to date to 28,037, more than most other international financial institutions'. In addition, Ping An won multiple international honors in AI, healthtech and other fields. Ping An's healthtech team won the championship in the biomedical translation task of 2020 Conference on Machine Translation (WMT2020).
  • Ping An accelerated the development of innovative businesses. In September 2020, Ping An Good Doctor launched a sub-brand "Ping An Doctor Home," an upgrade of its original innovative product "Private Doctor." On September 29, 2020, Ping An OneConnect Bank (Hong Kong) Limited, a virtual bank under OneConnect, officially opened for business in Hong Kong.

1.2 Key Figures

For the nine months ended September 30

2020

2019

Change (%)

Operating profit attributable to shareholders of

the parent company (in RMB million)

108,692

104,061

4.5

Basic operating earnings per share (in RMB)

6.15

5.85

5.1

Net profit attributable to shareholders of the

parent company (in RMB million)

103,041

129,567

(20.5)

Life & Health new business value (NBV)(1)

(in RMB million)

42,844

58,805

(27.1)

Ping An Property & Casualty combined ratio

(%)

99.1

96.2

2.9 pps

September 30,

December 31,

2020

2019

Change (%)

Number of retail customers (in million)

214.47

200.48

7.0

Number of internet users (in million)

578.89

515.50

12.3

Proportion of retail customers holding

multiple contracts with different

subsidiaries (%)

37.4

36.8

0.6 pps

Note: (1)

The computation of Life & Health NBV is based on the 11.0% risk discount rate.

2

2. PERFORMANCE REVIEW FOR KEY BUSINESSES

2.1 Overview

In the third quarter of 2020, China achieved strong results in the prevention and containment of COVID-19. As a result, the domestic economy saw a steady recovery and Ping An's business development through traditional offline channels gradually resumed. However, Ping An's long-term protection business was still adversely impacted by COVID-19 as domestic consumption demand was still recovering, large-scale offline events were still restricted in China, and offline face-to-face meetings had not increased to pre-epidemic levels yet. Moreover, the ongoing global spread of COVID-19 has sent major economies into recession and complicates the international environment. Facing such unfavorable conditions as rising credit risk and volatile equity markets, Ping An adopted various measures including strengthening risk management, advancing Ping An Life's reform, and promoting online- merge-offline operations to mitigate adverse impacts and lay a solid foundation for future sustainable growth. In the first nine months of 2020, the Group's net profit attributable to shareholders of the parent company decreased by 20.5% year on year to RMB103,041 million, but declining at a slower pace compared with the first half of the year. However, the operating profit attributable to shareholders of the parent company grew by 4.5% year on year to RMB108,692 million. The basic operating earnings per share was RMB6.15, up 5.1% year on year. The annualized operating ROE was 20.9%, down by 2.0 pps year on year.

Operating profit

Operating profit after tax is based on net profit from financial statements, excluding items that are of short-term, volatile or one-off nature. The operating profit after tax which excludes fluctuations of the following non-operating items can provide a clearer and more objective representation of the Company's business performance and trend. These items include:

  • Short-terminvestment variance, which is the variance between the actual investment return of the life and health insurance business and the embedded value (EV) long-run investment return assumption, net of the associated impact on insurance and investment contract liability. The investment return of the life and health insurance business is locked at 5% after excluding the short-term investment variance;
  • The impact of discount rate(1) change is the effect on insurance contract liability of the life and health insurance business due to changes in the discount rate; and
  • The impact of one-offnon-operating items is the impact of material items that management considered to be non-operating incomes and expenses, which in the first nine months of 2019 refers to the one-off impact of the decrease in the income tax for 2018 factored into the income tax for 2019 as a result of the Company's insurance subsidiaries implementing the Circular on Pre-taxDeduction of Fee and Commission Expense for Insurers issued by the Ministry of Finance and the State Administration of Taxation on May 29, 2019.

Note: (1) Refer to the significant accounting policies in the notes to the Company's 2019 Annual Report for information about the discount rate.

3

2020

Life and

Property

Other

health

and casualty

Other asset

businesses

For the nine months ended

insurance

insurance

Banking

Trust

Securities

management

Technology

and

September 30 (in RMB million)

business

business

business

business

business

business

business

elimination

The Group

Net profit attributable to

shareholders of the parent

company

69,113

11,003

12,981

2,239

2,381

3,808

4,669

(3,153)

103,041

Net profit attributable to non-

controlling interests

665

52

9,417

3

106

723

1,011

(126)

11,851

Net profit (A)

69,778

11,055

22,398

2,242

2,487

4,531

5,680

(3,279)

114,892

Excluding:

Short-term investment

variance(1) (B)

19

-

-

-

-

-

-

-

19

Impact of discount rate

change (C)

(5,687)

-

-

-

-

-

-

-

(5,687)

Impact of one-off material non-

operating items (D)

-

-

-

-

-

-

-

-

-

Operating profit (E=A-B-C-D)

75,446

11,055

22,398

2,242

2,487

4,531

5,680

(3,279)

120,560

Operating profit attributable

to shareholders of the parent

company

74,764

11,003

12,981

2,239

2,381

3,808

4,669

(3,153)

108,692

Operating profit attributable to

non-controlling interests

682

52

9,417

3

106

723

1,011

(126)

11,868

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Ping An Insurance (Group) Co. of China Ltd. published this content on 27 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2020 08:49:07 UTC


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Sales 2020 777 B 118 B 118 B
Net income 2020 132 B 20 022 M 20 022 M
Net Debt 2020 - - -
P/E ratio 2020 10,7x
Yield 2020 2,78%
Capitalization 1 548 B 236 B 236 B
Capi. / Sales 2020 1,99x
Capi. / Sales 2021 1,89x
Nbr of Employees 372 194
Free-Float 82,4%
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Mean consensus BUY
Number of Analysts 28
Average target price 90,23 CNY
Last Close Price 77,78 CNY
Spread / Highest target 31,4%
Spread / Average Target 16,0%
Spread / Lowest Target -5,35%
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Managers
NameTitle
Bo Yao Co-CEO, CFO, Executive Director & Chief Actuary
Sin Ying Tan Co-CEO, COO, Executive Director & Executive VP
Yong Lin Xie President, Co-CEO & Executive Director
Ming Zhe Ma Chairman
Jian Yi Sun Chairman-Supervisory Board