China Pacific Insurance – Life Troubles

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Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*Weak Results in Investment and P&amp;C: Ping An Insurance (2318.HK) [Ping An] reported 3Q21 results of CNY 23.6 bn, declining CNY 7.1 bn (23.2%) linked quarter.  Much of the struggle this quarter remained Ping An’s investment portfolio – likely a long-term thematic, where the net investment yield plummet 30 bp to 4.4%. Excluding Ping An Bank (000001.CH) [PAB] whose results were completely managed, all other business units disappointed linked quarter; and*Concerns Increase At Bank And With Expansion Plans:  PAB reported 3Q21 results of CNY 11.7 bn. Don’t shoot off the streamers just yet, credit quality was abysmal and Ping An clearly pulled on its bank lever. By our analysis, we find that credit remains incredibly challenged as net new NPLs are now accelerating at Indian bank pace of CNY 12.4 bn or 159.8% annualized.  Assuming that the accelerated credit break in the PAB portfolio continues to remain at its current level, we find that PAB’s reserves remain CNY 19 bn light.

*Weak Results in Investment and P&amp;C: Ping An Insurance (2318.HK) [Ping An] reported 3Q21 results of CNY 23.6 bn, declining CNY 7.1 bn (23.2%) linked quarter.  Much of the struggle this quarter remained Ping An’s investment portfolio – likely a long-term thematic, where the net investment yield plummet 30 bp to 4.4%. Excluding Ping An Bank (000001.CH) [PAB] whose results were completely managed, all other business units disappointed linked quarter; and*Concerns Increase At Bank And With Expansion Plans:  PAB reported 3Q21 results of CNY 11.7 bn. Don’t shoot off the streamers just yet, credit quality was abysmal and Ping An clearly pulled on its bank lever. By our analysis, we find that credit remains incredibly challenged as net new NPLs are now accelerating at Indian bank pace of CNY 12.4 bn or 159.8% annualized.  Assuming that the accelerated credit break in the PAB portfolio continues to remain at its current level, we find that PAB’s reserves remain CNY 19 bn light.  

Ping An Securities Group (Holdings) (231 HK)

China Pacific Insurance (Group) Co., (601601 CH)

Ping An Healthcare and Technology (1833 HK)

Ping An Insurance – Another Abysmal Result

Ping An Insurance (H)

Ping An Insurance – Another Abysmal Result