(Hong Kong, Shanghai, 26 August 2021) Ping An Insurance (Group) Company of China, Ltd. (hereafter "Ping An" or the "Group", HKEX: 2318; SSE: 601318) today announced its 2021 interim results for the six month period ended 30 June 2021.
Despite the complex and difficult business environment and market challenges in the first half of 2021, Ping An further advanced its integrated financial business under the brand philosophy of “Expertise makes life simple,” and our commitment to providing customers with “worry-free, time-saving, and money-saving” integrated financial services. The Company advanced the life insurance reform to enhance its comprehensive digital operations abilities and technological innovations. The Company provided customers with heartwarming “finance + healthcare” services through the healthcare ecosystem. Thanks to the successful long-term pursuit of integrated financial business strategy and exploration of technological innovation, Ping An is proud to present to customers and shareholders with satisfactory, heartwarming interim results.
Ping An’s business grew steadily. The Group achieved a 21.0% annualized operating ROE, with operating profit attributable to shareholders of the parent company rising 10.1% year on year to RMB81,836 million in the first half of 2021. Net profit was RMB67,963 million and net profit attributable to shareholders of the parent company decreased 15.5% year on year to RMB58,005 million respectively. Ping An attaches importance to shareholder return and continued to raise the dividend. The Group will pay an interim dividend of RMB0.88 per share in cash, up 10.0% year on year.
In addition, the Board of Directors held a meeting on 26 August, 2021 to consider and approve, among other things, the relevant resolution regarding the A Share Repurchase Plan. As approved by the Board of Directors, Ping An plans to repurchase RMB5-10 billion worth of A shares with proprietary funds, and the management promises to buy more shares of the Company.
Top business highlights in 1H2021:
- Profit and cash dividends continued to increase. Ping An achieved a 21.0% annualized operating ROE, with operating profit attributable to shareholders of the parent company rising 10.1% year on year to RMB81,836 million in the first half of 2021. Ping An attaches importance to shareholder returns and will pay an interim dividend of RMB0.88 per share in cash, up 10.0% year on year. As approved by the Board of Directors, Ping An plans to repurchase RMB5-10 billion of A shares with proprietary funds.
- Customer development further progressed. Ping An’s retail customers exceeded 223 million as of June 30, 2021, of whom 38.7% held multiple contracts with different subsidiaries of the Company. New financing scale achieved through corporate business cross-selling increased 36.1% year on year in the first half of 2021.
- The life and health insurance business advanced its reform and transformation. Ping An Life actively pursued high-quality transformation, leveraging the Group’s technologies and ecosystems to pioneer the reform. Improvements have been seen at some of the pilot business outlets, with first year premium per outlet up 6% since the beginning of the pilot reform. Moreover, Ping An Life implemented tiered, refined management of sales agents, vigorously developed Diamond Agents, steadily enhanced ordinary agents, and trained high-quality new agents. Per capita productivity of the agent channel improved steadily.
- The property & casualty insurance business maintained good business quality. Combined ratio improved by 2.2 pps to 95.9% and operating profit grew 30.4% year on year to RMB10,791 million in the first half of 2021. “Ping An Auto Owner,” the largest automotive service app in China, reached over 139 million registered users as of June 30, 2021, with over 31 million monthly active users in June.
- Ping An Bank maintained stable business growth and asset quality continued to improve. Ping An Bank’s revenue grew 8.1% year on year to RMB84,680 million in the first half of 2021. Net profit rose 28.5% year on year to RMB17,583 million. Non-performing loan ratio improved by 0.10 pps from the beginning of the year to 1.08% and provision coverage ratio rose 58.13 pps to 259.53% as of June 30, 2021.
- Healthcare ecosystem strategy progressed rapidly. Ping An Smart Healthcare empowered over 40,000 medical institutions and benefited approximately 950,000 doctors in 170 cities as of June 30, 2021. Nearly 62% of Ping An’s more than 223 million retail customers used services from the healthcare ecosystem. These customers held 3.2 financial contracts and RMB41,000 in assets under management (AUM) per capita, respectively, both of which are higher than for customers who were non-users of the healthcare ecosystem. Ping An Life launched the Ping An Zhen Xiang RUN Health Services Plan to provide nearly 30 types of heartwarming full-cycle health management services covering scenarios including health management, sub-health management, chronic disease management, and disease management.
- Innovative businesses grew further. Total revenue of technology business rose 14.2% year on year to RMB48,809 million in the first half of 2021. Lufax Holding’s business grew steadily, with net profit up 33.3% year on year. Revenues of Ping An Good Doctor and OneConnect grew over 30% year on year in the first half of 2021.
- Ping An continued to strengthen core technological capabilities. Ping An’s technology patent applications increased by 3,508 year to date to 34,920 as of June 30, 2021, more than most other international financial institutions’. Ping An uses artificial intelligence (AI) to promote sales, improve efficiency, and contain risks for its main businesses. Sales realized by AI service representatives increased 54% year on year to approximately RMB111 billion in the first half of 2021.
- Ping An contributed to carbon neutrality goals and supported rural development through Ping An Rural Communities Support. Ping An contributes to China’s carbon peak and neutrality goals by upgrading a comprehensive green finance initiative, leveraging integrated financial services, and utilizing green insurance, green investment and green credit. Moreover, Ping An continues to advance Ping An Rural Communities Support, moving from poverty alleviation to rural revitalization. The Group provided RMB36,024 million for poverty alleviation and industry revitalization as of June 30, 2021.
- Brand value continued to increase. Ping An moved up five places from the previous year to 16th in the Fortune Global 500 list (second among global financial companies), rose from seventh to sixth in the Forbes Global 2000 list, and ranked 49th in the BrandZTM Top 100 Most Valuable Global Brands list in 2021 (top among global banks and insurers for the first time, and top among global insurance brands for the sixth consecutive year).
Customer development: with deepened integrated financial services strategy, retail business and corporate business continued to grow.
Ping An has been dedicated to the development of both retail and corporate customers under a customer-centric philosophy and the integrated finance strategy.
Retail customer development ability continued to improve. Ping An’s retail operating profit increased 6.5% year on year to RMB69,240 million in the first half of 2021, accounting for 84.6% of its operating profit attributable to shareholders of the parent company. Retail customers grew 2.1% year to date to over 223 million as of June 30, 2021. The Group acquired 16.12 million new customers in the first half of 2021, 35.5% of whom were sourced from its internet user base. Retail cross-selling continued to deepen with 38.7% of retail customers holding multiple contracts with different subsidiaries, up 0.7 pps year to date. The Group had over 627 million internet users as of June 30, 2021, up 4.9% year to date.
Corporate business grew steadily. In the first half of 2021, written premium of the corporate channel achieved through cross-selling rose 27.5% year on year. New financing scale achieved through corporate business cross-selling expanded 36.1% year on year.
Financial services business: Life insurance advanced reform and transformation steadily. Operating profits of property & casualty insurance, banking and asset management business increased rapidly.
The Life & Health insurance business advanced reform and transformation to pursue high-quality growth. In the first half of 2021, operating profit and annualized operating ROE of Life & Health decreased by 2.5% year on year to RMB50,230 million and 4.2 pps year on year to 35.0% respectively. Consumer spending on long-term protection products was tempered amid uncertainties over international economic growth at home and abroad after the breakout of COVID-19. As a result, new business value (“NBV”) of Life & Health fell by 11.7% year on year to RMB27,387 million in the first half of 2021. The Company continues to deepen the reform of life insurance, promote the high-quality transformation of the team, and constantly improve the products and services. At present, the pilot reform of life insurance has achieved some positive results. The Company will unswervingly and continuously advance the reform to lay a solid foundation for the sustainable and healthy development of life and health insurance business in the next ten years.
Ping An Property & Casualty continued to improve its business quality. Combined ratio improved by 2.2 pps year on year to 95.9% and operating profit grew 30.4% year on year to RMB10,791 million in the first half of 2021 as Ping An Property & Casualty further optimized its customer mix and enhanced risk screening. The Company continued to apply technologies to online customer development and improve the services system. “Ping An Auto Owner,” the largest automotive service app in China, reached over 139 million registered users as of June 30, 2021. Monthly active users exceeded 31 million in June 2021. Ping An Property & Casualty’s leading online claims services have offered superior user experiences with 92% of family auto insurance claims processed via “One-click Claims Services” in the first half of 2021.
Ping An Bank furthered its strategic transformation and pushed forward digital operation to drive stable business growth. Revenue grew 8.1% year on year to RMB84,680 million in the first half of 2021. Net profit for the first half of 2021 rose 28.5% year on year to RMB17,583 million. Ping An Bank continued to de-risk by proactively responding to external risks and strengthening risk provisions. Non-performing loan ratio fell 0.10 pps year to date to 1.08% and provision coverage ratio rose 58.13 pps year to date to 259.53% as of June 30, 2021. Ping An Bank further advanced its retail business transformation and maintained steady growth in its businesses. Retail banking revenue and net profit grew 10.9% and 46.3% year on year respectively in the first half of 2021. Retail AUM rose 13.6% year to date to RMB2,982,011 million.
The Company’s investment portfolio of insurance funds grew 1.2% year to date to nearly RMB3.79 trillion as of June 30, 2021. The annualized net investment yield was 3.8%, and the annualized total investment yield was 3.5% under volatile capital markets and increasing impairment provisions. Despite a market-wide shortage of long-duration assets, the Company ensured that the duration gap is maintained at a reasonable level through asset allocation. The Company further improved investment risk management by strengthening risk review and post-investment management to keep overall investment risks under control.
In the first half of 2021, operating profits of the securities business and other asset management businesses maintained steady growth.
Innovative business: Ping An continued to strengthen its core technological capabilities. The healthcare ecosystem strategy progressed rapidly.
Ping An’s technological innovation focuses on the innovation of underlying fintech and healthtech. Ping An attaches great importance to developing its core technologies and securing proprietary intellectual property rights. Ping An’s technology patent applications increased by 3,508 year to date to 34,920 as of June 30, 2021. Ping An continued to rank first globally by fintech and digital healthcare patent applications, and ranked among the world’s top three players in terms of AI and blockchain patent applications.
Ping An continued to build leading technological capabilities, which have been widely utilized to empower its main financial businesses, promote sales, improve efficiency, and contain risks. Moreover, the Group continued to explore innovative business models to strengthen its ecosystems, namely “financial services, healthcare, auto services, and smart city services”. The total revenue and operating profit of the technology business for the first half of 2021 increased 14.2% year on year to RMB48,809 million and 72.1% to RMB6,962 million respectively.
Ping An continues to execute its healthcare ecosystem strategy. The Group’s comprehensive healthcare ecosystem encompasses 14 entities collaborating to serve the healthcare industry on all fronts, including healthcare management authorities, patients, service providers, payers and technologies. In respect of healthcare management authorities, Ping An cumulatively empowered over 40,000 medical institutions in 170 cities and benefited approximately 950,000 doctors as of June 30, 2021. In respect of patients, Ping An Good Doctor’s business continued to grow with an aggregate of 401 million registered users and cumulatively processed nearly 1,183 million online consultations as of June 30, 2021. Ping An Good Doctor’s revenue rose 39.0% year on year to RMB3,818 million for the first half of 2021. In respect of payers, Ping An HealthKonnect cumulatively won 22 provincial-level platform construction project bids as of June 30, 2021, including 10 bids won in the first half of 2021. In respect of service providers, Ping An will further advance its strategic layout in the healthcare sector by participating in the restructuring of Founder Group.
Lufax Holding is committed to serving small and micro-businesses. It furthered strategic transformation and maintained stable business growth. Revenue and net profit grew 17.1% year on year to RMB30,079 million and 33.3% year on year to RMB9,697 million, respectively, in the first half of 2021. The balance of retail credit facilitated increased 11.3% year to date, with the ratio of loans more than 30 days overdue down 1.0 pps year on year as of June 30, 2021. Peer-to-peer (P2P) AUM held by customers was substantially cleaned up as Lufax Holding further transformed its platform business.
OneConnect maintained stable growth with narrowed net loss. In the first half of 2021, OneConnect’s revenue increased 31.9% year on year. OneConnect had 460 premium customers, up by 114 year on year, including 113 premium plus customers, up by 26 year on year.
Autohome actively responded to market challenges and the core business achieved stable improvement. In the first half of 2021, Autohome’s revenue and net profit reached RMB3,780 million and RMB1,525 million, respectively. As automakers’ and auto dealers’ demand for online marketing services increased, Autohome’s revenue from the online marketplace and other business grew 33.3% year on year in the first half of 2021.
Ping An offers comprehensive and integrated smart city solutions centering on government services, business development, and citizen services. The smart city business cumulatively served 156 cities, 1.68 million companies, and 130 million citizens as of June 30, 2021. In respect of government services, Ping An’s smart government system has been deployed in over 50 cities and over 80 commissions, offices, and bureaus. In promoting the digital economy, the smart business services platform built by Ping An provided over 1.5 million companies with services throughout their lifecycles, including government subsidy application and risk management. In digital citizen services, the integrated citizen services platform built by Ping An was accessed over 3.3 billion times by nearly 42 million users in nearly 30 cities as of June 30, 2021.
Ping An actively fulfilled social responsibilities and comprehensively upgraded the green finance initiative. The Group contributes to China’s carbon peak and neutrality goals by leveraging integrated financial services, and utilizing green insurance, green investment and green credit. Moreover, Ping An continues to advance Ping An Rural Communities Support, moving from poverty alleviation to rural revitalization. The Group provided RMB36,024 million for poverty alleviation and industry revitalization as of June 30, 2021, supporting the construction of beautiful countryside.
Looking ahead, Ma Mingzhe, Chairman of Ping An, said, “We will unswervingly focus on strengthening our main integrated financial businesses and pursue high-quality development centering on Ping An Life’s reform and digital empowerment. We will accelerate technological innovation and ecosystem development, and pursue healthy business growth. Moreover, we will actively fulfill corporate social responsibilities, and create steadily growing value for customers, shareholders and society. We will make unremitting efforts to realize people’s aspiration for a better life and the common prosperity of society.”