Ping An, a Chinese company, sustains a loss of approximately 2.7 billion US dollars in its asset management sector.
In a significant turn of events, Ping An, one of China's leading financial conglomerates, reported a net loss of over USD 2.5 billion in its asset management business in 2023. This marks the first time the asset management segment has recorded a net loss since comparable data from 2016.
The losses were attributed to a combination of factors, including rising credit risks and volatile capital markets. The asset pressure in 2023 was particularly challenging, leading to a net loss in the asset management sector.
Ping An's asset management business includes trust, securities, financial leasing, and fund management. The net loss in the sector was due to market volatility in Hong Kong and mainland Chinese stocks, as well as provisions made to certain projects.
The news of the net loss sent shockwaves through the finance industry, with the Hang Seng Index dropping more than 2% on March 22, 2023, while Shanghai's CSI 300 closed 1% lower for the day. Ping An's share prices slumped on the same day, with its Hong Kong shares falling as much as 6.7% before paring losses to close at HKD 33.5 (USD 4.2), down 5.8%. Ping An's Shanghai-listed shares closed 3.5% lower at RMB 40.56 (USD 5.6) on the same day.
However, Rebecca Fu, senior vice president of Ping An, maintains a positive outlook, stating that the provisions made in the fourth quarter were not due to any single project, including Country Garden. Fu also clarified that the group's total exposure to Country Garden is 'very small'.
The losses in Ping An Asset Management's China business segment were recorded from 2022 into 2023, largely due to the challenging economic environment, including market volatility and the impact of China's regulatory and economic adjustments. The specific reasons for these losses included broad market disruptions and sector-specific challenges affecting financial assets.
In a move to reduce its holding, Ping An Asset Management sold stakes in Country Garden Holdings, a top Chinese private developer, on August 11, 2022, reducing its holding to 4.99%. Since the sale, Country Garden's stock price has dropped by more than 45%.
Despite the stock price decline, Fu believes the decline of Ping An is 'in a completely different direction from our fundamentals,' suggesting undervaluation.
This article was first published on Nikkei Asia and is republished here as part of 36Kr's partnership with Nikkei.
Read also:
- Quantum Computing Market in the Automotive Sector Forecast to Expand to $6,462.13 Million by 2034
- Texas finalizes 1.8 billion dollars for the construction of solar, battery, and gas-fueled mini-grids
- List of 2025's Billionaire Video Game Moguls Ranked by Fortune
- Solar project financing faces a hurdle due to imposed tariffs
