In major news on Hong Kong stocks, Ping An Insurance Company of China, Ltd. (HK:2318) reported the lowest profit in five years in its annual results for 2023. The company’s net profit declined by 23% to ¥85.67 billion compared to last year. Ping An shares traded down by 5.4% in today’s session following the announcement of results after the market close on Thursday.
Ping An is a Chinese company that offers financial products and services, including insurance and asset management.
Insights from Ping An’s 2023 Results
In 2023, Ping An’s operating profit reached ¥118 billion, down from ¥146.9 billion in 2022. Among its segments, the company’s core insurance business showed resilience, although it was offset by losses in asset management and a struggling technology business. Life & health, property and casualty insurance, and banking contributed ¥140.9 billion in operating profit, reflecting a slight decrease of 2.8% compared to the previous year.
In its asset management segment, the company reported a net loss of ¥19.52 billion in 2023. Additionally, the operating profit of the technology division declined by 56% to ¥2.98 billion.
Emphasizing its commitment to shareholders’ returns, Ping An announced a final dividend of ¥1.50 per share for 2023. This led to a full-year cash dividend of ¥2.43 per share, reflecting a 0.4% increase from the previous year. The dividend payout ratio, based on the operating profit attributable to shareholders, stands at 37.3%, continuing a streak of twelve years of total dividend growth.
Analysts’ Reactions
Post-results, analysts at Citigroup reduced their earnings forecast for 2024 and 2025 and the share price target as well. Citigroup called the results “muted,” despite Ping An registering growth in its new business value (NBV).
The NBV in the company’s life and health insurance business surged by 36% on a like-for-like basis to ¥39.26 billion, indicating significant sales and future growth potential.
On the other hand, Jefferies analyst Sam Wong reiterated his Buy rating on Ping An stock, forecasting 27% growth.
What is the Target Price of Ping An?
As per the consensus rating on TipRanks, 2318 stock has received a Moderate Buy rating, supported by four Buys and one Sell recommendation. The Ping An share price target stands at HK$58.34, signifying a huge potential upside of 64.4% in the share price.
