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News May 26, 2020 12:08 pm EqualOcean

One Connect is Included in the FTSE GEIS

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Aug 28, 2020 04:25 am ·

Ping An Bank Announces 1H 2020 Results: Revenue Up 15%

Ping An Bank released the financial results for the first half of 2020 on August 27. The revenue increased year-over-year by 15.5% to CNY 78.3 billion, the pre-provision operating profit (PPOP) rose by 18.9% to CNY 56.15 billion. At the end of June 30, Ping An Bank has total assets of CNY 4.19 trillion, which is an increase of 6.1% compared to the end of 2019. What is more, the total debt lending amount reached over CNY 2.5 trillion with a run-up of 8% from the end of December 2019. The retail business, which the company is focusing on, has recovered from the pandemic. Thel retail proportion in the total credit lending jumped up to 56.5%, which was mainly contributed by the mortgage. The car loan and the credit loan balance decreased. Asset under management (AUM) maintained the fast-growth, rose by 17.1% in the six-month period to CNY 2.32 trillion. However, the net income didn’t meet the expectation, posting an 11.2% drop to CNY 13.68 billion.  Ping An Bank (000001:SZ), controlled by the Ping An Group with 52.38% of the shares, founded in 1987, is one of the largest and fastest-growing urban commercial banks in China (check out our previous article on why it is a value stock). The company went public in 1991, becoming the first publicly traded commercial bank in China.  After the financial result was released, the stock price of Ping An Bank slightly increased, closing at CNY 14.46 per share on August 27. At the same time, its parent company, Ping An Group, released the financial performances.  

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Aug 28, 2020 04:23 am ·

Ping An Group Posts 1H 2020 Results with Several Sectors Grow Fast

Ping An Group posted its financial result for the first half of 2020 on August 27. During the six-month period, the company recorded an operating profit of CNY 74.31 billion with a small increase of 1.2%. The net income decreased year-over-year by 28.2% to CNY 75.97 billion. Even under this downturn, the company paid cash dividends of CNY 0.80  per share, which grew by 6.7% from the end of 2019.  Dissecting Ping An Group's performance by segment gives us quite a few insights. The life health insurance posted operating income of CNY 51.54 billion with a run-up of 6.4%. The premium from property insurance rose year-over-year by 10.5% and its market share went up by 0.5%. Ping An Bank (000001:SZ), recorded a 15.5% growth on revenue (check out its financial result). The technology sector performed best. At the end of June 30, the total valuation of technology companies reached over USD 70 billion with Ping An Good Doctor (01833:HK) surged by 108% and OneConnect (OCFT:NYSE) ran up by 84% (check out its financial results for 1H). The registered users of Ping An Good Doctor (read more in our latest article on the company) reached over 346 million, the daily diagnosis volume jumped up by 26.7% during the first half of the year. Online healthcare business income surged by 106.8%. What is more, the revenue of Autohome (ATHM:NYSE), an online service platform for automotive consumers, posted a slight drop of 1.6%, which still outperformed the market with vehicle sales dropping over 22.4% in China during the six-month period.  Ping An Group is one of the largest financial conglomerates in China, with the business deploying in almost all financial service fields, such as insurance, banking, asset management, securities, and technology. Some star companies in the technology sector are in the center of the public discussion. One Connect and Lufax, the two largest fintech arms of Ping An Group, now worth over USD 8.5 billion and CNY 270 billion. Ping An Group went public in 2007 on Shanghai Stock Exchange with the ticker of 601318.

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Aug 17, 2020 12:15 pm · Jiemian

PayPal China Appoints New CEO

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Aug 13, 2020 01:58 am ·

How Ping An Affiliate OneConnect Navigates China's Growing Economy

► The countrywide digital transformation trend is poised to ignite the development of the entire fintech industry. ► OneConnect (check out our previous article about the company) has been performing rather well.  In the past decade, the financial service industry in China has been expanding at a historically high speed. The total assets of financial institutions have risen by 78%, from CNY 179.36 trillion in 2013 to CNY 318.69 trillion in 2019, according to the country’s central bank.  However, compared to the western world, China still has low financial service penetration. One example is the financial institution depth index, which is used to gauge the development level of the financial service industry, calculated as the total financial assets to the GDP. For China, the index posted 322% in 2019, while the US reported 481% in 2018 (most updated). There still exists a certain gap between China and the US, no matter from the household mortgage ratio, the insurance density per capita, the financing convenience for small and medium-sized businesses (SMBs) or the family asset allocation. Now, China is chasing the developed market within as many fields as possible. The financial service industry, which fintech companies like OneConnect (OCFT:NYSE), target, is expanding.  Inevitable difficulties in tech-transformation incubated fintech companies In this new era, financial institutions are actively funding technology, especially in China, which is struggling to close the gap between it and the level of the western market. The enthusiasm has led to more investments flowing into the fintech sector; the financing market remains at an active level.  The financial service industry is competing beyond pure finance – also on the technology level. According to the forecasts by International Data Corporation (IDC), a global market intelligence provider, 40% of the banks in China will move their business to the cloud system, 35% of insurance companies will start using AI on their claiming processes comprehensively in 2020, 40% of the banks will start seeking fully-integrated technology solutions by 2024, and 25% of the banks will use quantum computing in the asset management field by 2025. Also, the average technology expenditure level in the US is around 9% to 12%, significantly larger than the range of 2% to 4% in China now. For fintech companies such as OneConnect that offer tech-based financial solutions, it is reasonable to suppose that their time is coming.   However, it is not easy for Chinese financial institutions to achieve digitalization themselves. According to the China Banking and Insurance Regulatory Commission, there will be a large number of small to medium financial institutions filing bankruptcy or being acquired because of limited technology developing capacity.  In a research report published by the Internet Finance Association of Small- and Medium-sized Banks (supported by OneConnect and Accenture), small to medium banks in China form the main group that has the most urgent need for digital transformation, in order to increase competitiveness while operating with least capacity in technology applications.  Actually, it is not only small banks – most financial institutions can't support themselves in matters of digital transformation. According to Oliver Wyman, the largest five ones globally by total assets have 15% to 20% technicians, while the range in China is 3% to 5% on average, with most of them lacking financial backgrounds.  In order not to be left out of the loop during a time of intense competition, financial institutions need some outside forces. This offers OneConnect more room to develop.  Never let opportunities slip  The pandemic in the first half of 2020 brought large difficulties to the entire economy. Financial institutions experienced tough times as well. Lockdown significantly decreased the business for financial institutions due to a lack of labor force, which also spurred the demands of digital transformation – this was when OneConnect quickly discovered an expanding field of opportunity. AI client representatives, smart financial advisors, cloud-based data management solutions, and online business operation system construction were developed by OneConnect during the pandemic, to support their operations. This move was reflected in the revenue coming from operation support, which surged year-over-year by 170.7% in the second quarter of 2020, accounting for the largest part of the total income, and therefore pushing the revenue to rise 48.4%.  Now, OneConnect has become the technology cloud services platform with the largest client base in China. Looking back to the company's track on coping with the micros, it developed a clear business model around technology solutions and overseas deployments.  Clear technology strategies to keep itself on trend Unlike some fintech companies that deploy business on a variety of technologies, OneConnect chose to focus on three core technologies: Blockchain, Big data, and AI, to provide comprehensive financial solutions that cover all major financial industries as well as the front, middle and back-office functions. According to the Financial Technology Thoughts and Actions Report by OneConnect, since 2015, the off-counter rate in banks has increased from 77% to 88%, which means banks need to explore online business to reach more clients and better serve them. At present, the company has established the Gamma AI Research Lab and applied for more than 772 patents, and applied to many fields like digital marketing, robo-advisor, digital loan, and risk management models. Based on IDC's forecast, the spending in the blockchain market in China will reach USD 1.7 billion in 2022 with the five-year CAGR over 80% from 2017. Of course, OneConnect has noticed. Since 2018, the company has been actively researching the blockchain, with applications landed on 14 business scenarios, such as asset-backed securities, blockchain finance, and reinsurance. It has designed, developed, and deployed a blockchain-based international trade finance platform for Hong Kong Monetary Authority in 2018, and participated in blockchain platform construction for Tianjin port in 2019, which represents the first blockchain-based cross border trade project in China. In 2020, the deployment sped up even more. OneConnect helped build a financing platform for SMBs in Guangdong, and blockchain networks to support trades and logistics for ports in the greater bay area of Guangdong, Hong Kong, and Macao.  As for big data analytics, the company has helped financial institutions on risk management, marketing, business data collaboration, and smart operation fields with over 10 solutions and products.   Increasing tech-support demands in the entire Asian area Some countries in Asia have been also speeding up recently in fintech deployments, especially for India, which exceeded China in fintech funding since late 2019, giving the sign of the large opportunities outside China. Also, large fintech companies in China seem to be more likely to survive and become stronger under this tense competition and transferring interests from investors.  OneConnect discovered the trend and aggressively expanded the overseas market. At present, it has businesses in 16 countries, such as Singapore, Indonesia, Thailand, Japan and Korea. In sum, OneConnect has proven itself to be smart enough to grasp the ever-appearing opportunities in the industry, which pushed its market capitalization to the recent CNY 34 billion, ranking fourth in the best performing global ‘post-unicorn’ IPOs listed by Hurun report.

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Aug 11, 2020 10:02 pm · SEC

OneConnect Issues 16.5 Million ADSs

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Aug 7, 2020 03:16 am ·

Chinese Fintech OneConnect: the Stock You Can Trust?

► OneConnect’s stock price has rocketed since the beginning of 2020. ► The revenue contributed by clients outside the Ping An ecosystem continues to increase.  Since the beginning of 2020, the stock price of OneConnect (OCFT:NYSE), a New York-listed fintech company belonging to the so-called ‘Ping An ecosystem,’ has soared by 169% from USD 10.03 to the historical peak at USD 26.99  on July 10. On August 3, it closed trading at USD 23.86 apiece.    Six Wall Street analysts are currently maintaining an overall 'overweight' rating on the company, with four of them recommending 'buy' and two suggesting to hold the asset. In its last updated report on August 4, Morgan Stanley adjusted up the target price of OneConnect to USD 27 based on its comprehensive services and the infinite upward potential in China's fintech industry. Morgan Stanley also forecasted the company to hit a profit in 2023 with the revenue growing at 47% CAGR in the next three years. Bank of America Merrill Lynch raised the target price of the company from USD 16.2 to USD 26.5 in July with the restatement of 'buy' rating, as the promising growths in the digital transformation in China's financial industry and the blockchain field. The continuing growth of revenue fascinates American investors The robust performance of OneConnect since it went public on the New York Stock Exchange at the end of 2019 has been attracting more attention. Even with the tense relationship between China and the United States, as well as the difficult situation of Chinese tech spinoffs in the overseas market, US investors seem to have faith in the company, which is reflected in its rising share price.  After the financial results for the second quarter of 2020 released on August 4 during the off-trading period, the stock price of OneConnect opened 3% higher on August 5 of USD 25.52, to the highest point of USD 26.37, with a continuing upward tendency observed. In the three-months period, the company reported strong growth in revenue and gross profit of 48.4% and 93.4% respectively. The losses narrowed from CNY 340 million to 331 million, brought by the decreasing cost rates from scale effect. The losses mostly owed to the large and increasing R&D expenditure. An unwavering persistence in developing new products spurs the company forward.  A similar but stronger scene happened in May, when the company posted its financial performance for the first quarter, pushing the stock up by over 40% in the following five trading days, with the transaction amount over USD 4 million. The US stock market was in bear mode during the same period, with three major indexes having gone down, while OneConnect kept hitting historical-high records. The US investors have started to pay more attention to this hidden fintech Chinese giant.  Even during the pandemic, in the first three months of 2020, OneConnect reported a 29.6% increase in revenue and a 6.3% jump-up on gross profit margin. Bred by Ping An in the past, shifting to independence in the future Incubated and ‘bred’ by the Ping An Group, OneConnect grew up from an associated department at first to become an independent US-listed company.  With business deploying in fintech solutions, banking and asset management, OneConnect distributes its client group into Ping An Group and its subsidiaries, premium customers that refer to the non-Ping An Group customers that contribute annual revenue of at least RMB100,000, and basic customers. The non-Ping An and non-Lufax clients are defined as third-party customers, which is the company’s key focus of the diversification strategy. As of the end June, Ping An Group, Lufax, and the third party account for 46%, 13%, and 41% in the total revenue for the first half of 2020, respectively.  In the first quarter, the revenue of OneConnect coming from Ping An Group and Lufax recorded CNY 228 million and CNY 83 million respectively, accounting for 53.5% of the entire figure, which has dropped 17.1% since 2017. What's more, the revenue contributed by the third-party clients and the company is focusing on increasing, posting CNY 270 million with an increase of 50.4% that is higher than the total revenue growth of 29.6%.  For the entire year of 2019, the third-party clients contributed revenue of CNY 1.03 billion with a rise of 107%, significantly higher than the total revenue growth of 65%. The customer base of the company now includes all of the major banks, 99% of the city commercial banks, and 52% of the insurance companies in China.  All the figures are telling the truth: though the company still depends on Ping An to some extent, it is getting more independent.  This five-year-old child is proving itself ready to grow. 

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Jul 24, 2020 04:42 am · inpai.com

Du Xiaoman Financial Helps to Employ Over 3.3 Million People

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Sep 11, 2020 02:59 am ·

Zking Insurance Raised CNY 5.64 Billion

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Sep 4, 2020 11:31 am · China Star Market

CITIC Securities Cedes JD.com Fintech Arm JDD's IPO

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Sep 4, 2020 01:18 am · Reuters

China Merchants Bank Prices its 5-year Green Bond

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