China’s Ping An Insurance (Group) Co. has long argued it should be treated like a high-growth technology company instead of a seller of life policies. After a US$90 billion plunge in its market value, it’s now priced more like a property developer at a time when the country’s real estate sector is out of favour.
This year’s 40% stock dive has cut its price-to-earnings ratio to just above 6, slightly more than the Shanghai Stock Exchange Property Index’s multiple of 5.7 and a far cry from the 20-plus commanded by insurance peers Berkshire Hathaway Inc. and AIA Group Ltd. That’s been fueled by a botched real estate investment, Beijing’s technology crackdown that hit the value of its spinoffs and a slumping life business.
While it’s turning to technology to bolster the productivity of top salespeople, and getting rid of poor performers, it also has to contend with China’s shifting job landscape. The average monthly income for a Ping An agent fell 8% to 5,793 yuan ($897) last year. That can make it less financially appealing than delivering food at Meituan.
