The Motley Fool

Are Ping An Insurance Group’s Shares Cheap to Buy Now?

Ping An Insurance Group Co (SEHK: 2318) is an insurance-turned-integrated financial services provider in China, providing insurance, banking, asset management and internet finance products and services to close to 200 million retail customers.

In my previous article here, I looked at two reasons why investors should like this group. For those who agree with me, the next question to answer here is whether the company is cheap to buy now.

Clearly, there is no easy answer to the above question. However, we can still get some insight by comparing Ping An’s current valuation (as of the time of writing) with the market’s valuation. The three valuation metrics I will focus on are; the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield.

I will be using the iShares MSCI Hong Kong Index Fund (NYSEARCA: EWH) as a proxy for the market; the iShares MSCI Hong Kong ETF is an exchange-traded fund that tracks the MSCI Hong Kong Index, a market cap-weighted index made up of a diverse selection of small-, large- and mid-cap stocks primarily traded on the Hong Kong Stock Exchange.

The numbers

Ping An currently has a PB ratio of 2.4, which is higher than that of the iShares MSCI Hong Kong ETF’s PB ratio of 1.2. Yet, its PE ratio of 10.7 times is lower than the ETF’s PE ratio of 12.5.

Meanwhile, the company’s dividend yield is 2.1% while the market average’s dividend yield is at 4.0%. The lower the dividend yield, the higher the valuation.


Overall, I think Ping An is trading at a reasonable valuation as compared to the market average, given its low PE ratio, offset by its high PB ratio. Nevertheless, dividend investors might not find the company’s dividend yield to be particularly attractive.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Lawrence Nga doesn’t own shares in any companies mentioned.