China Ping An Xie Yonglin: Why do you believe that Ping An's stock price "is gold and will always shine"?

Text/Wang Enbo

Listed insurance companies have entered the annual report disclosure season, and Ping An of China has fired the "first shot".

In 2023, Ping An achieved an operating profit attributable to its parent company of RMB117.989 billion, cash dividends grew for 12 consecutive years, and the value of new business in life and health insurance increased by 36.2% year-on-year. Although there is no lack of pressure, it shows resilience in stability.

However, under the influence of the cyclical transformation of the life insurance industry, Ping An's share price has fluctuated in the past period. At the results conference, Xie Yonglin, general manager and co-CEO of Ping An, responded that the current price-to-book ratio (PB) and price-to-earnings ratio (PE) of Ping An are very low, and it is believed that gold will always shine, and the price will always return to the same value.

Xie Yonglin was recently interviewed by China News Service (CNS) to explain in detail Ping An's development path and its judgment on industry trends, and to respond to market concerns such as real estate-related risk exposure and Founder's restructuring. He believes that Ping An has a natural advantage in doing a good job in science and technology finance and helping to develop new quality productivity.

After the pain, Chinese financial institutions are more competitive

In recent years, China's internal and external environment has changed, and the financial regulatory authorities have also stepped up supervision.

Xie Yonglin said frankly that in the short term, the development of financial institutions faces some challenges, such as the problem of interest margin loss in the insurance industry and the narrowing of interest rate spreads in the banking industry. However, in the long run, with the deepening of the high-quality development process of the financial industry, the competitiveness of the entire industry will continue to increase.

He believes that China has the absolute advantages of a super-large-scale market, strong production capacity, and a complete industrial chain, and the internal vitality of economic development is sufficient, and the basic trend of rebounding and long-term improvement has not changed, which is the biggest fundamental for the high-quality development of financial institutions.

"We have confidence and patience in China's economy. In Xie Yonglin's view, promoting high-quality development, adjusting structure, improving quality, and increasing efficiency require reform and breakthrough, which is a long-term and gradual process.

The financial sector also needs to accelerate its growth to adapt to the switch to China's development model.

Xie Yonglin said that in the process of speeding up the construction of a financial power, the development concept and model of financial institutions will also change, from scale growth to quality growth, from focusing on economic benefits to emphasizing social benefits, and from extensive development to refined development with more controllable risks. "There will be pains in the transition, but once we enter a new stage of development, the international competitiveness of mainland financial institutions will be greatly enhanced. ”

Talking about Ping An's development path, Xie Yonglin said that Ping An has grown at a compound growth rate of more than 20% over the past 20 years, and hopes to rely on the strategic model of "integrated finance + medical pension" and use its leading financial technology and medical technology capabilities to grasp China's huge market opportunities in the fields of finance and insurance, wealth management, medical care and pension, and tap the growth potential of new quality productivity.

He specifically mentioned that the connotation of the strategy is consistent with the "five major articles" of science and technology finance, green finance, inclusive finance, pension finance and digital finance that have been reiterated by the official many times, and the follow-up business actions will firmly focus on the same direction and focus on these five directions.

The overall housing-related risks of Ping An Insurance are controllable

The real estate market is still in the process of adjustment and transformation, and the risks related to major financial institutions are the focus of market attention.

According to the annual report, as of December 31, 2023, the balance of real estate investment in Ping An Insurance's capital portfolio was 203.987 billion yuan, accounting for 4.3% of the total investment assets.

"Ping An Insurance's overall exposure to real estate is controllable and the risk is controllable. Xie Yonglin emphasized that nearly eighty percent (78.4%) of the real estate investments held by Ping An Insurance Capital are holding properties (shopping malls, logistics real estate, long-term rental apartments, etc.), which are measured by the cost method and have very stable historical returns.

According to his observation, the current adjustment of supply and demand in the real estate market and the official release of a series of policies have released a strong signal of "stabilizing real estate, expanding demand, and reducing costs", and it is expected that the real estate industry will gradually enter the stage of development of high quality and new models. Ping An will continue to monitor and pay attention to the equity of real estate companies held by insurance companies, and the purchase and sale actions will be determined according to changes in the industry and company fundamentals, as well as stock price fluctuations.

The progress of the restructuring of Founder Group is also a major concern in the market. Xie Yonglin revealed that the implementation of the reorganization has been carried out in an orderly manner, the relevant work has entered the final stage, most of the assets have been delivered, and the overall progress has met expectations. At present, in accordance with regulatory requirements and established disposal strategies, the work related to asset disposal is steadily promoted, and insolvent entities such as the property sector and financial companies are actively promoting the judicial procedures of bankruptcy liquidation; the progress and effect of the disposal of real estate business are in line with expectations, and the investment costs of the disposed assets are basically recovered. In the process, the stock risk has been properly resolved.

Regarding the rumors of the "merger of Ping An Securities and Founder Securities", Xie Yonglin responded that the two securities matters will be steadily advanced in accordance with regulatory guidelines. At present, the focus of the business is the in-depth empowerment and coordinated development of the two certificates, and the relevant issues will be properly promoted and resolved under the regulations and guidelines of the relevant regulatory authorities, and the information disclosure obligations will be fulfilled in a timely manner in accordance with the regulatory requirements in the process.

"Real knives and real guns" serve the real economy

Ping An's management often uses a "house map" to illustrate its corporate strategy of "integrated finance + medical care for the elderly", and the base of the "house" is technology empowerment. At a time when new quality productivity has attracted much attention, it seems quite appropriate.

Xie Yonglin believes that Ping An has a unique advantage in technology and finance. Based on the characteristics of comprehensive finance, Ping An can use a combination of insurance investment, commercial banks and investment banks to serve science and technology enterprises at different stages of development, consolidate the foundation for industrial development, and strengthen the anti-risk ability of the industrial chain.

For example, Ping An Bank has issued loans of more than 110 billion yuan to high-tech enterprises, "specialized, special and new" enterprises, national technological innovation demonstration enterprises, and individual champion enterprises in the manufacturing industry. Ping An Insurance Capital can also carry out equity investment to guide the flow of funds to technology-based enterprises with good prospects.

New quality productivity is itself green productivity. Xie Yonglin revealed that Ping An provides financial resources for green industries such as renewable energy, energy-saving renovation and green buildings. As of the end of 2023, the amount of green insurance was 48.89 trillion yuan, the balance of green loans reached 146.345 billion yuan, a year-on-year increase of 26%, and the scale of green investment in insurance funds reached 128.568 billion yuan, a year-on-year increase of nearly 20%.

In his view, regardless of the new quality productivity, the five major articles, or the original intention of the financial industry to return to serve the people's livelihood and serve the entity, the direction and connotation of these proposals are highly consistent, that is, practitioners are required to use their brains more and do everything possible to find out the path of high-quality development of the financial industry and serve the people and the real economy.

According to statistics, as of December 31, 2023, Ping An has invested more than 8.77 trillion yuan to support the development of the real economy. "Only when the economy is good can we live well, so we hope that the real economy is good, and we hope that the people have money in their pockets. Xie Yonglin said that Ping An will continue to "do a good job in this matter" and be a "doer and doer" for high-quality financial development.

Source: The country is a through train

Editor: Qin Jing

Editor-in-charge: Wei Xi