【True Insight Hong Kong Stock Masters】Hong Kong stock market fluctuates, Ping An Insurance (Group) Company of China's net profit grows 6.8% in the first half of the year

Hong Kong Stock Market Trends and Analysis

U.S. stocks showed mixed performance on Thursday. Strong earnings from semiconductor stocks drove the market to open higher and hit new highs, but profit-taking at peak levels led to uneven closing results for the three major indices. The U.S. dollar strengthened, with the 10-year Treasury yield rising to 4.09%. Gold prices continued to break records, while oil prices stabilized. Hong Kong's pre-market ADRs were generally weak, suggesting a lower opening for the local market. Mainland stocks fell yesterday, with the Shanghai Composite opening high but closing down 1.1% at the day's low, below the 3,200-point mark, though overall trading remained active. Hong Kong stocks initially rose but later declined, peaking at 20,700 points before weakening alongside mainland markets, briefly falling below 20,000 points before narrowing losses slightly by the close. Trading volume further decreased. The weakening yuan, lack of policy surprises, and share placement activities dampened market sentiment, prompting investors to adopt a cautious short-term outlook. The index is expected to test support at 19,800 points, with resistance near 20,800 points.

Industry News

$PING AN(02318.HK) reported a net profit of RMB 746.19 billion in the first half of the year, up 6.8% year-on-year. Its three core businesses—life & health insurance, property insurance, and banking—all saw growth. The new business value of life & health insurance reached RMB 223.2 billion, up 11% YoY, with agent-channel new business value rising 10.8% and per-agent productivity up 36%. As of June 2024, Ping An Life had 340,000 agents. Ping An Property & Casualty posted insurance service revenue of RMB 1,619.1 billion (+3.9% YoY), with a healthy combined ratio of 97.8%. Ping An Bank's net profit grew 1.9% to RMB 258.79 billion. By end-June, Ping An served 236 million individual customers, 24.9% of whom held four or more contracts within the group, with a retention rate of 97.8%, showcasing cross-platform advantages. Benefiting from PBOC policies, improved stock market performance boosted Ping An's earnings, aiding valuation recovery.

(The author is an SFC-licensed professional. Neither the author nor related parties hold the aforementioned stocks.)

Investment Director, Grand Vision Asset Management | Kwok Ka Yiu, CFA

Date: Friday, October 18, 2024