Ping An

Ping An Insurance (Group) Company of China, Ltd. is one of China’s large insurance groups. According to the analysis of an insurance-capital industry insider, China Life and Ping An are the two biggest giants in the insurance-capital industry, comparable in product structure, investment layout, asset scale and overall strength; China Life’s style is steady and its investments forward-looking, while Ping An is regarded as fierce and full of a “wolf spirit”. In terms of insurance business revenue and net profit, according to a June 2018 Caixin report, PICC Group ranked in the industry only behind China Life and Ping An. Ping An started out in Shekou, Shenzhen, initially as a regional insurer with registered capital of only 42 million yuan; according to a May 2018 Caixin report, by the end of 2017 its total assets had reached 6.5 trillion yuan, with operations covering insurance, trusts, banking, securities, funds and other major business formats. In 2013, Ping An and ICBC, as China’s only two financial enterprises, were together selected as global systemically important institutions.

According to a May 2018 Caixin report, Ping An founder Ma Mingzhe was born in December 1955 and by 2018 had been at the helm of Ping An for 30 years; Ping An had internally made efforts to cultivate a successor, and Ren Huichuan was promoted to group general manager from March 2011, but the businesses under his charge shifted from trusts and asset management to smart cities. On April 26, 2018, a claim circulated in the market that Zhu Congjiu, vice governor of Zhejiang Province, would become chairman of Ping An Group; that afternoon, during a board meeting, Ping An Group issued a statement denying the rumour, but the rumour still caused Ping An’s market value to fall sharply that day. According to Caixin, Ping An’s shareholding structure is dispersed; in December 2012 HSBC Group sold its entire 15.57% stake in Ping An H shares for a total of US$9.385 billion, and Caixin Weekly reported at the time that the actual funder behind the ostensible buyer, Charoen Pokphand Group, was Xiao Jianhua of the “Tomorrow Group”. According to Ping An’s 2018 first-quarter report, the four related SPV entities still held 9.55% of Ping An as of the end of the first quarter of 2018, making them the single largest shareholder; Huaxia Life, under the “Tomorrow Group”, held 1.62%, for a combined 11.17%. In the same period, China Securities Finance Corporation held 4.44% and Central Huijin held 2.68%. The report also said that Ma Mingzhe had previously approached several large state-owned financial institutions to discuss arrangements for them to take stakes.

In real estate investment, Ping An and China Life once formed a contrast: China Life invested in Sino-Ocean, and Ping An subsequently invested in Country Garden Holdings, becoming its second-largest shareholder. According to an August 2017 report by The Economic Observer, Country Garden Holdings bought a 25% stake in CIMC Industry & City with Ping An’s support; CIMC Industry & City is mainly engaged in the development and operation of industrial real estate, with industrial parks in 10 cities across the country; the logistics real estate company GLP had also been willing to cooperate with CIMC Industry & City, but Country Garden Holdings moved more decisively.

Logistics was one of the key areas of Ping An’s expansion during this period. Reporters from The Economic Observer learned through multiple channels that Ma Mingzhe, chairman of Ping An Group, had issued an assignment requiring its subsidiary Shenzhen Ping An Real Estate Industrial Logistics Co., Ltd. to seize logistics market share as fast as possible. The company, with dual headquarters in Shenzhen and Shanghai, bought large amounts of logistics land across the country and invested in 28 companies over two and a half years, including Jinan Anhua Warehousing, Guizhou Pinghua Warehousing, Liuzhou Warehousing, Hunan Anxin Warehousing and Changsha Pingduan Warehousing. The report said that, through acquisitions or its own construction, Ping An Real Estate already had about 30 parks nationwide with a total area of 4 million square metres, the better-known ones being the Chengdu Airport project and the Shanghai Lingang cold storage facility. In terms of market share, GLP remained in an absolutely leading position in China’s industrial logistics market, while Ping An played the role of a chaser, building on industrial parks and taking GLP as the target to catch up with. The report said that Ping An Group’s logistics bases were mostly sited close to GLP’s logistics bases, with some warehousing bases even directly opposite each other; senior managers of Ping An’s logistics parks mostly came from the Ping An system, while many grassroots employees came from GLP, and a Ping An insider said Ping An acquired land directly across from GLP and poached staff with two to three times the salary, and few people refused. Because Ping An’s warehousing rents were lower, many customers followed the staff into Ping An. A person close to GLP believed that GLP, as a foreign enterprise, operated in a standardised manner but lacked vitality and innovation and reacted too slowly to a rival like Ping An; with the entire industrial park sector undergoing a reshuffle, GLP would inevitably be affected and had to change itself. In terms of business model, Economic Observer reporters learned that Ping An Group’s investment department had set up a real estate fund model, bringing in operating companies to cooperate at industrial park bases, while Ping An itself tried to take on the role of asset manager. The aforementioned insurance-capital insider analysed that logistics is an industry with long-term favourable prospects, that GLP, in which China Life had invested, almost monopolised China’s logistics market, and that Ping An found it hard to find a second company capable of rivalling GLP to invest in, which could explain why Ping An was so aggressively expanding into the logistics industry.

In September 2018, Ping An Asset Management Co., Ltd. disbanded its active equity investment team and turned to quantitative investment. Reports linked this to Ma Mingzhe’s repeated calls to embrace new technology, strengthen risk control, and cut costs and raise efficiency. In June 2021, CapitaLand sold partial stakes in its portfolio of six Raffles City assets in China to Ping An Life Insurance Company of China, recouping more than 9.6 billion yuan of capital, and said its next investment priorities would cover industrial parks, logistics and data centres. According to a September 2021 report by The Economic Observer, after the pandemic, warehousing and logistics parks were among the fastest-recovering types of commercial real estate, with capital clearly chasing them; CBRE data showed that from 2015 to 2020 the total value of social logistics grew at a compound annual rate of about 9.53%, and the net investment return on logistics real estate in first-tier cities such as Beijing, Shanghai and Guangzhou was 6% to 8%, higher than the 4% to 5% for commercial real estate. In the same period, GLP had assets under management in China of US$72 billion, investing in, developing and managing more than 400 facilities in 68 regional markets, covering logistics and warehousing, manufacturing and R&D, data centres and new energy infrastructure; its China asset service operating platform ASP, established in 2016, managed more than 500 parks with a managed area of over 40 million square metres, serving more than 3,000 customers.

On executive compensation, as early as 2007 Ping An chairman Ma Mingzhe became a focus of public opinion over a “sky-high annual salary” of as much as 66 million yuan; thereafter the pay of Ping An’s senior executives gradually declined, though it remained highly competitive within the insurance industry. In 2019, Lee Yuan Siong, who had long been in charge of the insurance business and was one of the three co-CEOs, left Ping An and “transferred” to become CEO of AIA. Among domestic insurance companies, Ping An’s executive pay levels have consistently been at the top of the industry. In 2022, although pay was cut further from the previous year, three Ping An executives still received annual pay at the ten-million-yuan level: co-CEOs and executive vice presidents Jessica Tan and Yao Bo received pre-tax remuneration of 14.44 million yuan and 12.16 million yuan respectively, down 2.57 million yuan and 2.14 million yuan from the previous year; compliance head and chief risk officer Zhang Xiaolu received pre-tax remuneration of 11.86 million yuan, down 700,000 yuan from the previous year. Ma Mingzhe ranked seventh in the same period with 6.78 million yuan; co-CEO and general manager Xie Yonglin received 7.45 million yuan, less than the 8.48 million yuan of group deputy general manager Ji Guangheng, who ranked fourth. Others with annual pay above 5 million yuan were vice chairman Sun Jianyi (7.01 million yuan), deputy general manager and chief human resources officer Cai Fangfang (6.51 million yuan), chief operating officer Fu Xin (6.13 million yuan) and deputy general manager Huang Baoxin (6.05 million yuan). Overall, in 2022 Ping An had a total of 14 serving directors, supervisors, senior executives and key personnel, whose combined pre-tax remuneration received from the company was 100 million yuan, down from 107 million yuan in the previous year.

As of 2023, Ping An’s shareholding was relatively dispersed, and in legal terms it had no controlling shareholder, nor an actual controller or ultimate beneficiary. Only two shareholders held more than 5% directly or indirectly: Charoen Pokphand Group Company Limited, owned by Thai tycoon Dhanin Chearavanont (6.52%), and Shenzhen Investment Holdings Co., Ltd., under the Shenzhen State-owned Assets Supervision and Administration Commission (5.27%). Among Ping An Group’s specialised subsidiaries, life insurance is the foundation on which Ping An was built, and the next most important is Ping An Bank, in which Ping An and its controlling subsidiary Ping An Life together hold 58% of the shares. After the resignation of former chief financial officer Yao Bo, only three executive directors remained under chairman Ma Mingzhe: general manager and co-CEO Xie Yonglin, co-CEO and executive vice president Jessica Tan, and deputy general manager Cai Fangfang.