Hong Kong stocks tumbled on Friday from a three-week high ahead of key global events including a Group of Seven summit and a U.S. Federal Reserve interest rates decision but still managed to post a weekly gain.
To see the opportunity, Ping An Insurance (Group) Company of China Ltd (2318.HK) (601318.SS) remained strong during the weak market. Ping An is China's biggest insurer.Thanks to the improvement in services quality and application of innovative technologies, Ping An has maintained a steady and healthy growth over the years. In 2017, Ping An’s revenue reached RMB890.882 billion, up 25% year on year; net profit amounted to RMB99.978 billion, up 38.2% year on year; net profit attributable to shareholders of the parent company soared by 42.8% year on year to RMB89.088 billion.Ping An’s assets totaled about RMB6.49 trillion, up 16.4% from the beginning of the year.
The value of the company is highly recognized by the market. It reigns supreme as the industry No. 1 by profit and return on equity. Its H-share market capitalization, at $585 billion, is 2.4 times larger than China Life (2628.HK), and 7.8 times above PICC(2328.HK).
With efforts, Ping An has maintained its place as the top insurance company globally for the second year in a row and moves from the 16th spot in 2017 to 10th on the 2018 overall Forbes Global 2000 rankings for all sectors, owing to the strong performance in market capitalization and strong growth in multiple performance indicators, including revenue, profit and assets.
Riding on the rise of new technology, the growth of the fintech market unsurprisingly makes it a hot spot for investment opportunities–now and in the coming years. Ping An has early-mover advantage in mobile apps and underlying technologies from artificial intelligence and blockchain.
Over the past decade, the company has put so much emphasis on fintech. Ping An has the largest big data platform and the most technology patent applications among Chinese financial institutions. These industry-leading technologies have been widely adopted within Ping An Group by its members such as Lufax, Ping An Puhui. Moreover, these technologies have empowered external financial institutions via open platforms such as Finance One Account.
To unlock the investment value, Ping An Healthcare and Technology Company, also known as Ping An Good Doctor (1833.HK) listed in May 2018.A spin-off of Ping An Insurance Group, Good Doctor is currently China’s largest online health care and medical platform by user numbers. At the end of 2017, it had 193 million registered users.
Cited by the Citigroup report, the house initiated Good Doctor at Buy with target price of $60. The research house highlighted that Good Doctor has the greatest scale of internet healthcare platform in Mainland China. Good Doctor was believed to seize a sustainable pioneering position in the fast-growing internet healthcare industry, leveraging the huge customer base and distribution channels of PING AN. In JPMorgan's report dated in June 2018, Good Doctor was initiated at Overweight with target price of $68. The upside potential reached 44%. The company was expected to see FCF (RMB79 million) by 2020.
Per an investor viewpoint- a sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Over the past 10 years, Ping An has returned an average of 1.00% per year to shareholders in terms of dividend yield. In the near future, analysts are predicting a payout ratio of 30.78%, leading to a dividend yield of around 3.05%. Furthermore, EPS should increase to CN¥5.71. UBS Lifts Ping An Target to $109 as industry top pick on its defensive product portfolio and forceful broker sales capability.
Currently, the 14-day RSI for Ping An is sitting at 55. A value of 50-75 would identify a very strong momentum trend. If there’s one type of stock you want to be reliable, Ping An’s dividend stocks and their strong income-generating ability is the smart choice.