ping an's development strategy - ping an...

Ping An's Development Strategy

June 2014

2

Cautionary Statements Regarding Forward-Looking Statements

• To the extent any statements made in this presentation containing information that is not historical are essentially

forward-looking. These forward-looking statements include but not limited to projections, targets, estimates and

business plans that the Company expects or anticipates will or may occur in the future. These forward-looking

statements are subject to known and unknown risks and uncertainties that may be general or specific. Certain

statements, such as those include the words or phrases "potential", "estimates", "expects", "anticipates", "objective",

"intends", "plans", "believes", "will", "may", "should", and similar expressions or variations on such expressions

may be considered forward-looking statements.

• Reader should be cautioned that a variety of factors, many of which may be beyond the Company's control, affect

the performance, operations and results of the Company, and could cause actual results to differ materially from the

expectations expressed in any of the Company's forward-looking statements. These factors include, but are not

limited to, exchange rate fluctuations, market shares, competition, environmental risks, changes in legal, financial

and regulatory frameworks, international economic and financial market conditions and other risks and factors

beyond our control. These and other factors should be considered carefully and readers should not place undue

reliance on the Company's forward-looking statements. In addition, the Company undertakes no obligation to

publicly update or revise any forward-looking statement that is contained in this presentation as a result of new

information, future events or otherwise. None of the Company, or any of its employees or affiliates is responsible for,

or is making, any representations concerning the future performance of the Company.

Vision & target

Development stage

Business model

Ping An's Strategic Planning

PA's Internet Finance

4

Development Vision

Vision & target Development stage Business model Outlook

Ping An

Integrated Finance, World Leading

5

Banking

Insurance

Investment

Health

Food

Home

Auto

Entertainment

Strategic target: To be a globally leading personal finance provider


Ping An

6

• Insurance-centered fast

development

• Exploration of the integrated

finance model

• Explore management path with

international standards

• Fast development path of non-

insurance business

• Adopt the all-around integrated

finance strategy, "one customer,

one account, multiple products,

one-stop services"

• Develop integrated finance,

beat market average on main

business, push cross-selling

• “Finance driven by

technology to service your

lives", explore the model of

"Internet + integrated

finance"

The previous 10 years The recent 15 years The next 10 years

Evolve from a pure P&C insurance company into an integrated financial service group, to

fully enter the new stage of “finance driven by technology" in the future


Ping An

7

For the next 10 years, Ping An will adopt the strategy of the synergistic development

of traditional and non-traditional businesses

Traditional financial business Non-traditional financial

business

Ping An’s

Portals

Health

Food

Home

Auto

PA Life

Ping An

Insurance units Banking units Investment units

PA P&C

PA Annuity

PA Health

PA Bank

CGI

PA Trust

PA RE

PAAMC

PAUOB Fund

Russell

PA Leasing

PA Securities

China's leading

personal

financial service

provider

Entertain

ment


Ping An

8

Financial

Supermarket

Products Services

• Insurance

• Banking

• Small-sum consumer credit

• Trust

• Securities

• Fund

• AM

• ...

• Outlet counter

• Agents

• Call Center

• MIT

• ATM/Remote machine

• Website

• Mobile app

• ...

Customer

migration

Tra

ditio

na

l + n

on

-trad

ition

al

"Financial supermarket" + "customer migration"

"One customer, one account, multiple products, one-stop services"

Two channels

• Insurance customers migrate

to the banking, AM areas

• Non-traditional business

customers migrate to the

traditional financial areas

Banking

AM

Insurance

Non-traditional business: from life to finance


Ping An

9

Unique competitive edges enhance the corporate value

Benefiting from China's sound economic

development, all of the Company's businesses

maintain steady growth

Spurring the innovation in various fields, Ping An

has always acted as the industry leader

The most complete range of financial licenses, the

widest business scope, and the closest share-holding

relationship have formed China's leading group in

the personal financial service area

The powerful centralized back-office management

platform results in cost advantage and synergistic

effect

The solid strength of leading technologies paves

the way for the optimal customer experience

The cities based in which the

Company's level-2 branches

for main business operate


Ping An

Internet finance

PA's development strategy

Ping An's strategic planning

PA's Internet finance

11

1. Within 10 years, more than 60% of cash and credit cards will

disappear

2. Within 15 years, the front-office work of most small- and mid-sized

financial institutions will be done by the Internet enterprises

3. The front-office work of financial institutions will move towards

"small size, community base, intelligentization, and

diversification"

We expect

The impact the Internet will impose on the financial industry in the future

Internet finance Ping An's development strategy Internet

finance

12

Channel-based

Product-driven

Traffic-based

Life-related

Price-driven

Channel-based

Product drivers

Remote services

Traditional finance Finance Internet Internet finance

The core competency of traditional finance, finance Internet, and Internet finance


finance

http://www.veerchina.com/q/%E9%93%B6%E8%A1%8C/tuku_2169128442.html

13

The full view

of a customer

consists of

3,600 types of

massive

dynamic data

with different

characteristics

Three main trends for the Internet: mobile, intelligent, cloud computing

Internet finance uses big data/cloud computing to embed finance into your life

Conclusion Internet finance Ping An's development strategy Internet

finance

14

Why Ping An can do it

Ping An's 25

years of

Integrated finance

experience

In-depth

understanding

of consumers

Knowledge and

application of

modern

technologies


finance

15

Ping An's social finance: three main functions, five main portals, three layers of users

Social communicat

ion

Social e-commerce

Social finance

PA

's Intern

et fina

nce

Social finance

333 life scenario applications

Banking, insurance, investment

Wealth

Management

Health

Management

Life

Management

Ping An's employees (800k)

Ping An's clients (80mn)

The public

Th

ree lay

ers of u

sers F

ive m

ain

porta

ls

To incorporate finance into life

"Health, Food, Home, Auto, and Entertainment"

Th

ree main

fun

ction

s


finance

16

Three main functions

Wealth management

Health management

Life management


finance

17

Wealth management


finance

18

Wealth management: TOA

Securities Annuity

Ba

nk

ing

WM

L

u

f

a

x

Asset cloud

- Assets & liabilities

- Account integration

- Bookkeeping

Bonus points cloud

- Use points

- Earn points

Health cloud

- Health archives

Management

PA account + non-PA account

Financial account + non-financial account

Physical account + virtual account

WM investment + consumption + bonus points


finance

19

More consumptions, more points, more

promotions

Wanlitong - China's biggest universal

bonus points platform Online

Connected to 300 e-

commercial platforms,

including China's top 20

Offline

As of end-2013, the

number of offline

merchants reached 200k

Examples


finance

20

Health management


finance

21

Playing games,

seeing health

Easily managing

your health

status every day

In-house research and

development

Global strategic alliance

Third-party support

Sub-health management

Health promotion

Improving habits,

control indicators

• Blood

glucose

• Blood fat

• Cholesterol

• Body Mass

Index

• ...

G C

M F

Game

Health

management

Chronic

diseases

Management

Health

map Electronic

health files

Healthy people Sub-healthy people Unhealthy people

Health management: To provide health management solutions to three groups of people


finance

22

• Health data of more than 80mn clients nationwide with complete life table and disease data

• More than 3000 associated hospitals and checkup centers nationwide

• Hundreds of professional actuaries and doctors

• Having risk factors for healthy lives

• World-leading health management system (Vitality)

• ...

We can do it


finance

23

Life management


finance

24

Life management: Focus on "health, food, auto, home, and entertainment"

Residents' main consumption structure

健康医疗

食品

住房家居

交通

娱乐休闲

衣着

家庭日用

通讯

教育培训

其它

PA's standards for the

selection of portals

• PA-related

• Finance-related

• Life-related

Health

Food

Home Auto

Entertainment


finance

25

• Health: Yijiantong

• Food: Wanlitong/Yi-wallet

• Home: PA Haofang

• Auto: PA Haoche

• Entertainment: Wanlitong/Tianxiatong/ Yi-wallet

Health

Food

Live

Vehicle

Play

Heal

th

Food

Hom

e

Auto

Ente

rtain

ment

Life management: Incorporate financial services into life scenarios


finance

26

PA's mobile client side: All entries connecting to the "five tongs"

Take Tianxiatong for instance


finance

27

Positioning

Business model

Business path

Business structure

Five major portals

Three layers of customers

• A globally leading

personal financial service

provider • Financial

supermarket

• Customer

migration

• Insurance customers migrate to

the banking, AM areas

• Internet finance customers

migrate to traditional finance

• Traditional: Banking,

insurance, investment

• Non-traditional: Wealth

managment, health

management, life

management

• Health, Food, Home, Auto, and

Entertainment

• TOA, Tianxiatong, Wanlitong,

Yijiantong, Zhifutong

• 800k employees

• 80mn customers

• The public

Conclusion


finance

28

Ever since IPO, Ping An's embedded value has kept growing, recognized by investors

Using the integrated finance strategy and the outstanding operating performance, Ping An has been widely recognized by domestic and overseas

investors since its listing, with its intrinsic value growing fast

Source: Corporate annual reports, prospectus, brief introduction

Intrin

sic va

lue (R

MB

'00

mm

)

•Acquisition of

Shenzhen City

Commercial

Bank

•Establishment

of PAAMC

(HK)

•Strategically

investment in SDB

•Establishment of

PAUOB Fund

•Private

placement of H

shares to Jinjun

•Controlling SDB

Ping An has evolved from a pure P&C insurance company to China's

leading integrated finance group providing diversified financial

products and services

In June, 2004, listing on HKEx; in March, 2007, listing on A-share

market. Using the capital market, PA's business has been growing fast,

and its intrinsic value has kept rising, becoming a quality blue-chip

company widely recognized by domestic and overseas investors

•Listing on SSE

•Consolidation of

Shenzhen City

Commercial

Bank

•Listing on

HKEx

•Establishment

of PAB

•Establishment

of PAA

•Establishement of

PAAMC

•Establishment of

PAH

•Successfully issued RMB26bn A-

share convertible bonds

•Completion of the consolidation

of "two banks"

•In July, 2013, selected into the list

of the first batch of G-SIIs as the

only Asia-based insurer in that list

Appendix: Achievements during the ten years since IPO

191

372 484 656

1,503 1,229

1,553

2,010

2,356

2,859

3,297

2003年底 2004年底 2005年底 2006年底 2007年底 2008年底 2009年底 2010年底 2011年底 2012年底 2013年底

29

Various Indicators Achieved Solid Growth

1,827

6,513

33,603

0

5000

10000

15000

20000

25000

30000

35000

40000

2003 2007 2013

RM

B 1

00 M

illio

n

Total Assets

Compound Growth Rate 33.8%

149

1,072

1,827

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2003 2007 2013R

MB

100 M

illio

n

Equity Attributable to Shareholders of

the Parent Company


21

151

282

0

50

100

150

200

250

300

2003 2007 2013

RM

B 1

00 M

illio

n

Net Profit Attributable to Shareholders of the Parent

Company


637

1,653

3,626

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2003 2007 2013

RM

B 1

00 M

illio

n

Operating Income


>32

>43

>80

0

10

20

30

40

50

60

70

80

90

2003 2007 2013

RM

B M

illio

n

Customer number


15.00%

16.90% 16.40%

0.00%

5.00%

10.00%

15.00%

20.00%

2003 2007 2013

ROE

Average Growth Rate 14.3%

30

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