Author: He Jing
Produced: Focus Finance
This May Day, Ping An of China (601318) was on the cusp.
On April 30, Ping An announced its participation in the reorganization of Founder Group , and there was a lot of discussion.
Ping An stated, “Participating in the reorganization of Founder Group is an important measure for the company to further deepen the strategic layout of the medical and health industry and actively build a medical and health ecosystem.”
With health, can it be safe? Investors do not seem to approve this story.
Until August 17, Ping An’s acquisition of shares in New Founder was approved. Since the beginning of this year, Ping An’s stock price has fallen almost all the way, with a decline of more than 40% since the beginning of the year.
Such a large decline and bearishness are considered by many investors to be related to their previous investment failures in the real estate sector. Today, Ping An has started its "healthy" dream.
Faced with the ever-declining stock price, Ma Mingzhe finally made a move.
From August 27 to September 3, Ping An of China repurchased the company's A shares for 6 consecutive trading days. At the same time, Chairman Ma led a group of senior executives to increase their holdings, with a total of 2.78 billion yuan in real money.
After the implementation of the combination boxing to September 7, Ping An of China closed the gains in 5 days within 8 trading days.
The gains and losses of the invisible real estate predators
In 1995, Ping An Real Estate , the predecessor of Shenzhen Ping An Property Investment Management Company, was formally established, and Ping An’s real estate planning began at this time.
However, due to policy restrictions, Ping An’s initial real estate road was not smooth. Until 2010, China Insurance Regulatory Commission issued the "Interim Measures for the Investment of Insurance Funds in Real Estate", which released the restriction on the investment of insurance funds in real estate.
The following year, Shenzhen Ping An Property Investment Management Co., Ltd. changed its name to Ping An Real Estate. Sufficient cash flow helped Ping An to enter the game strongly and became the famous "invisible land king" in the real estate industry in one fell swoop. There is no lack of Ping An's figure behind China's Top 20 real estate companies. According to this year's interim performance report, Ping An's investment properties have a book value of 66.617 billion yuan, accounting for 1.8% of the investment portfolio.
And Ping An mainly deploys the real estate field in three ways: one is to purchase stocks of well-known real estate companies, or to invest in the form of debt or equity; the second is to jointly acquire land with real estate companies and establish joint ventures to jointly develop projects; The third is to purchase commercial real estate for long-term benefits.
With the long-term huge dividends in the real estate industry, Ping An has naturally tasted some sweetness. In 2018, through a massive reduction of 31.32 million shares of Country Garden, Ping An cashed out approximately HK$450 million. But it was also this year that buried the current crisis.
In 2018, through two successive equity acquisitions, Ping An held a 25.25% stake in China Fortune , and invested 36 billion yuan in bonds and 18 billion yuan of superimposed equity investment, totaling 54 billion yuan.
But what I did not expect is that under the effect of multiple "cooling needles" in the real estate industry this year, China Fortune Land Development has a debt crisis. According to the announcement on July 31, China Fortune Land Development and its subsidiaries failed to repay the bank as scheduled. The principal and interest of debt in the form of loans, trust loans and other debts amounted to 8.518 billion yuan, and the company's accumulated failure to repay the debt principal and interest on schedule totaled 81.566 billion yuan.
Ping An, the “second shareholder” of China Fortune Land Development, is not safe anymore.
Therefore, Ping An’s impairment provision, valuation adjustments and other equity adjustments of China Fortune-related investment assets amounted to 35.9 billion yuan, and the amount of net profit attributable to shareholders of the parent company after tax was 20.8 billion yuan. The impact of operating profit attributable to shareholders of the parent company after tax is 6.1 billion yuan.
In addition, in 2019, Ping An subscribed for approximately 1.787 billion shares of China Jinmao at HK$4.81 per share, accounting for approximately 15.20% of the share capital. At that time, the market value was approximately HK$8.5 billion. And as of the close of September 6,China Jinmao's share price is 2.54 Hong Kong dollars, and its market value has almost been cut in half.
While foreign investment is stepping on thunder, the substantial reduction of holdings by many shareholders also involves the nerves of the market.
On June 17, Ping An of China issued an announcement stating that it had recently received a notice from a shareholder with more than 5% of the shares of CP Group Co., Ltd., through its subsidiaries from January 1, 2021 to June 16, 2021. , The cumulative reduction of 182,570,107 of the company’s H shares by the transaction of equity derivatives to deliver shares, accounting for 1% of the company’s total equity.
Coincidentally, Yuxing Technology also announced on July 12 that it would sell all its 3 million H shares of Ping An Insurance of China, and will lose approximately HK$53.26 million in 2021 due to this batch of transactions.
The most eye-catching thing is the private equity bigwig who has long been optimistic about Ping An and has held shares for more than ten years. Li Chi cleared Ping An.
According to data from the semi-annual report, Ping An achieved a net profit of 58.01 billion yuan in the first half of the year, a year-on-year decrease of 15.5%. Among them, the life insurance business with the highest profit ratio was 29.256 billion yuan, accounting for 50.4%, a year-on-year decrease of 35%.
Although at the same time as the release of the semi-annual report, Ping An played a combination card of "company repurchase + executive increase in holdings" to enhance market confidence. Said that the company intends to use its own funds of no less than RMB 5 billion and no more than RMB 10 billion to repurchase A shares at a price of no more than RMB 82.56 per share.
Ping An’s "United Health" dream
With unfavorable investments, falling premiums, and falling stock prices, Ping An still has not stopped.
In 2016, Ping An’s chairman Ma Mingzhe publicly stated, “One hand controls the user’s money and the other controls the user’s health, so that users cannot do without Ping An.”
is on the track of medical health and commercial insurance. Everyone wants to be the Chinese version of United Health, and China Ping An is no exception. However, although Ping An began to deploy the medical sector very early, almost all of them are online medical services. In order to open up a complete closed loop of medical care, insurance, and general health, Ping An urgently needs an offline medical institution.
As a result, he participated in the reorganization of Founder Group,It has become the most important move in Ping An's overall health plan.
On December 2, 2019, Founder was unable to redeem a bond with a principal of 2 billion yuan, detonating the prelude to a debt of 100 billion yuan. In February 2020, after the bankruptcy and reorganization of Founder Group entered the judicial process. Ping An of China entered the market decisively in an attempt to win the "Peking University Medical", the "heavenly king" in the medical field.
At the interim results meeting, Ping An’s general manager and co-CEO Xie Yonglin bluntly said: “Next, we will only keep medical and other sectors related to Ping An’s core business. It’s true that the demand for medical and health will continue to erupt with the arrival of the silver age. With offline fixed-point medical services to empower insurance products, insurance will have more temperature and selling points, which has reached the ceiling for premium growth. For Ping An, it is undoubtedly a strong focus for the future.
Just like in the chairman's speech in 2020, Ma Mingzhe said, "Finance is the safe present tense, and medical care is the safe future tense."
However, the number of medical beds at Peking University is almost halved compared to the peak period. With debts of tens of billions and weak profitability, is it a help or a drag on Ping An’s "insurance + health" joint health model blueprint?
In addition, Ping An has almost no experience in offline hospital management before. How to manage such a medical group with a complicated property relationship and governance structure is the most important issue that needs to be faced after the completion of the merger.
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