Ping An warns of virus impact as net rises 39pc to 149b yuanBusiness | Bloomberg and Avery Chen 21 Feb 2020
Ping An Insurance (2318), China's largest insurer by market value, reported its net profit rose 39.11 percent last year but missed expectations, and warned the coronavirus may have an impact on its business.
Net profit climbed to 149.4 billion yuan (HK$165.59 billion) as a stock-market rally and tax relief helped fuel earnings growth. That trails the 157.3 billion yuan average estimate of 21 analysts surveyed by Bloomberg.
Revenue grew by 17.6 percent year-on-year to 1.27 trillion yuan. But growth in new business value, a gauge of the profitability of new life policies sold, slowed to 5 percent from 7.3 percent in 2018.
Operating profit, which Ping An says better reflects its performance, rose 18.1 percent to 132.96 billion yuan. Operating profit after tax of the life and health insurance business gained by 24.7 percent to 88.95 billion yuan. The total investment income grew by 1.2 times to 174.68 billion yuan, thanks to capital market recoveries.
Ping An declared a final dividend of 1.30 yuan per share, making a total dividend reaching 2.05 yuan for 2019. The basic earnings per share were 8.41 yuan.
Although Ping An has plowed billions of dollars into tech - and senior management has used that to argue for a higher stock valuation - operating profit from Ping An's fintech and health-tech businesses, which sell products from facial recognition to blockchain solutions, slumped 40 percent to 4.7 billion yuan.
At Lufax, Ping An's online wealth management and retail lending platform, customer assets under management dropped by 6.1 percent "due to the asset portfolio adjustment and restrictions on consumer finance products," Ping An said. Wealth management transaction volumes fell by almost 30 percent. Within customer assets under management, consumer finance was hit the hardest, with its assets under management plunging 45 percent. Ping An said that category was "greatly affected" due to regulatory requirements.
Ping An also warned the coronavirus has certain impacts on the business operation and may affect the quality or the yields of its credit assets and investment assets. It is still assessing the impact of the outbreak on its financial position and operating results.
Ping An rose 0.6 percent to HK$91.60 ahead of the results yesterday.