The company is aiming to spend $22 billion to dump its old-school image and reputation.
Ping An Insurance is changing lanes in the hopes of transforming itself into a technology company.
The firm has come up with a plan to spend billions in order to recreate itself in this new way.
That said, the Ping An Insurance executives have not yet managed to sway investors to see their way in spending $22 billion for this purpose. The money would be spent on everything from artificial intelligence (A.I.) to blockchain. The execs must now convince the company’s investors that this move will be worthwhile and that the firm doesn’t need to remain a traditional insurer anymore.
Since the start of the year, the Hong Kong traded Ping An Group Co’s stock has climbed by 36 percent. It’s currently trading at 9.7 percent times the forecasted earnings over the next 12 months. This isn’t nearly as high as Alibaba Group Holding Ltd. and Tencent Holdings Ltd, which are each trading at over 20 times projected earnings.
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The majority of the Ping An Insurance earnings continue to come from traditional policies.
Most of the financial and insurance company’s earnings are still from traditional policy sales. It sells property and casualty policies and health plans, as well as life insurance. Regardless, it has redirected its intentions to be able to develop and flip tech start-ups.
Still, Good Doctor, an online health provider listed by Ping An in 2018, is bleeding money. Similarly, Autohome Inc, a car-buying website, has lost nearly one quarter of its value since it peaked last May. Lufax, a wealth management platform, has been planning its I.P.O. for some time but can’t move forward due to regulatory changes. Equally, a disaster with WeWork has harmed the share-sale prospects of OneConnect, a fintech unit.
According to Leon Qi, an analyst covering financial companies at Daiwa Capital Markets Hong Kong Ltd, there isn’t much for investors to be “over excited” about in terms of the Ping An Insurance technology push. He said that this tech spinning process isn’t reaching expectations. Qi currently has Ping An at HK$88 a share, which is the lowest target price for the insurer among all Bloomberg’s tracked analysts.