Text | Rong Finance
Author | Yin Nan
Since the beginning of the year, the A-share insurance index has fallen by about 36%, and Ping An has dropped more than 40%, falling below a trillion yuan market cap. On August 26, Ping An released its interim financial report. For the public concerned with Ping An, whether it can put an end to recent negative factors, whether real estate investment risks are controllable, whether life insurance reforms have been effective, and when the insurance sector will stabilize—all these questions need answers.
01 Plunging into China Fortune Land Development erodes RMB 20.8 billion in profits; investment portfolio yields weaker than peers
On August 26, Ping An released its 2021 interim financial report. The company achieved revenue of RMB 635.649 billion, a year-on-year increase of 0.9%; net profit attributable to shareholders was RMB 58.005 billion, a year-on-year decrease of 15.55%; operating profit attributable to shareholders was RMB 81.836 billion, a year-on-year increase of 10.1%; annualized operating ROE was 21.0%. The company declared an interim dividend of RMB 0.88 per share in cash to shareholders.
The decline in net profit is closely related to the investment in China Fortune Land Development. The mid-year report provided for impairment losses on related investment assets in China Fortune Land Development amounting to RMB 35.9 billion, affecting the net profit attributable to shareholders by RMB 20.8 billion and the operating profit attributable to shareholders by RMB 6.1 billion. According to Rong Finance, Ping An's cumulative investment in China Fortune Land Development amounted to RMB 54 billion. As of June 30, 2021, Ping An held 25% of the tradable shares, surpassing China Fortune Land Development’s 22.85%, making Ping An the largest shareholder of China Fortune Land Development. This time, Ping An, who loves to be the 'second largest real estate shareholder,' became the top shareholder.
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