Ping An A-Shares Trade at Rare Discount as Mainland Finance Hit

Concern that China will further free up bank deposit rates is prompting investors to dump financial stocks across the mainland, with insurers including Ping An Insurance (Group) Co. becoming collateral damage.

Ping An’s yuan-denominated shares are now trading at a discount to those in Hong Kong, where price moves are driven more by global sentiment than China policy. With less than six weeks to go before A-shares are included in MSCI indexes, investors are likely to focus on this discrepancy, which makes the insurer the only dual-listed financial stock to seem relatively cheap.

Ping An Insurance’s H-shares have almost doubled over the past year while its A-shares trailed with a 79 percent gain. President Alex Ren said last month the insurer remains undervalued as its core insurance business is still “cheap” relative to its rapid growth. Moreover, it’s “not right” to still apply a discount on its integrated financial business model when valuing the conglomerate that spans insurance, banking, and asset management, he said.

Overall, dual-listed shares on the mainland traded at an average 23 percent premium over Hong Kong shares.

— With assistance by Jun Luo, and Amy Li

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