A surge in the price of Ping An Insurance (Group) Co's shares this year has made it the world's second largest insurer by market value after Berkshire Hathaway, reported Bloomberg.
Shares of the Chinese insurer, which more than doubled this year to boost the company’s market valuation to about US$208 billion, jumped yesterday to a new record of HK$86.20 (US$11.04) per share after Chief Financial Officer Jason Yao told reporters that the firm’s technological prowess was under-rated. Warren Buffett’s firm has a market value of about $448 billion.
Ping An’s valuation has much room to increase as the company gradually spins off Internet technology units for their own listings, Mr Yao said on Monday in Shenzhen, where the company held its Investor Day.
Optimism surrounding Ping An’s business prospects ahead of its investor meetings helped propel the company's share price. The company’s strength in technology, such as artificial intelligence, big data and biometrics, has been cited by analysts for positive reviews of the company.
After spending heavily on technologies in the past few years, Ping An is entering “harvest time” as such investments enhance its financial services, tech products bring in new revenue, and potential spin-offs of units create additional value for shareholders, Mr Yao said.
“The market had been valuing Ping An Insurance as a pure insurer and ignoring the technology side of the company, while the management also believed it’s been undervalued,” Liao Chenkai, a Shanghai-based analyst with Capital Securities, said. “Investors are betting the company could benefit from its financial technology strength and boost overall business.”