(Yicai Global) March 18 -- Shares in Ping An Insurance (Group) Company of China advanced today despite the Chinese insurance giant logging a 29 percent plunge in net profit last year from the year before once the impairment costs from an investment in a struggling property developer were taken into account.

Ping An’s share price [SHA:601318] closed up 5.34 percent in Shanghai at CNY47.93 (USD7.53), while its Hong Kong-listed shares [HKG:2318] closed up 4.79 percent at HKD57.95 (USD7.41).

Ping An posted profit of CNY101.6 billion (USD16 billion) in 2021, the company, one of China’s largest financial groups, said in its annual earnings report released yesterday. This is now the second year in a row that the insurer has made less money. In 2020, profit fell by 4.2 percent year-on-year.

The company’s investment in China Fortune Land Development devalued CNY43.2 billion (USD6.8 billion) in 2021, the Shenzhen-based firm said. The Beijing-based developer defaulted on a CNY530 billion (USD83.3 billion) debt at the beginning of last year. Ping An said at the time that its exposure was around CNY54 billion.

However, after the impairment cost has been discounted, the firm actually achieved a 6.1 percent jump in operating profit to CNY148 billion (USD23.3 billion).

Nevertheless, the firm’s stock price nearly halved in value in 2021. The slump was due to the impact of the complex external environment on the blue chips and the second was because of the bottleneck that emerged in the general development model of the insurance sector, co-Chief Executive and Chief Financial Officer Yao Bao said at the earnings conference.

As of the end of last year, Ping An had more than 227 million clients, a gain of 4.1 percent from the start of the year. Some 32.4 million customers joined in 2021 and 35.5 percent of them were from the Internet.

Shoring Up Confidence

Ping An’s share price is at a historic low, Yao said. The company will continue to buy back shares and give out dividends to shore up its share price and convey confidence to the market.

The company paid stockholders a dividend of CNY2.38 (USD0.37) in cash for each share in 2021, an annual increase of 8.2 percent, amounting to CNY43.1 billion (USD6.78 billion). Ping An has hiked its dividends for 10 straight years.

Ping An also launched a share buyback scheme worth CNY10 billion (USD1.5 billion) in August last year, offering to repurchase shares at a maximum of CNY82.56 (USD12.97) per share. By the end of the year the firm had already bought back 77.7 million shares at a cost of CNY3.9 billion (USD612.9 million), Yao said.

Editor: Kim Taylor