Ping An beats expectations

Shenzhen’s dominant financial services group, Ping An Insurance, beat expectations for the first half of the year, announcing yesterday its biggest jump in interim net profits in five years. The company’s stock rose in Hong Kong trading today, unsurprisingly.

Ping An’s net income surged 68% to RMB97.7 billion, far outstripping the 19% prediction in a Bloomberg survey of analysts. This was largely due to some one-off gains on tax incentives (thank you, Shenzhen Government), but revenue also rose by a healthy 17% to RMB690.25 billion.

Think about this, dear readers: Ping An is on track to generate RMB1.4 trillion of revenues at this rate, for the full year. That would be about half of the city’s entire GDP.

Pin An report
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Not all of that is generated in Shenzhen, of course. Ping An is a national – and increasingly global – company. It is into much more than insurance, with subsidiaries in banking, wealth management, online healthcare, biotech, and more. It has its tentacles in all sorts of startup sectors, running incubators that spew out companies such as Velotrade, which we profiled recently. At its heart, it is more of a tech company than anything else. Which is perhaps why it still invests so much in its home town, and why it likes to be close to the international capital markets and educational institutions in Hong Kong.

More interesting to us is that Ping An seems to want to spread its wings globally. Perhaps that is to be expected of a company ranked seventh on the Forbes List and 29th on the Fortune 500. The group has hired some foreigners in recent years and obviously believes its tech capabilities can generate products that would appeal to an international audience. As HSBC and other global groups struggle in the disruptive new world of fintech, could the coming years be Ping An’s moment to shine? Or might its leadership be (understandably) concerned about getting onto the radar of US President Donald Trump? Let’s see.

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