Ping An Insurance stocks climb $101bn in 2017

Bloomberg

Insurance may lack the buzz and cachet enjoyed by tech companies, yet the stock of one Chinese company in the industry has kept pace handsomely with some of the highest-flying champions of the digital revolution.
Ping An Insurance (Group) Co.’s success shows how the lines between “new” and “old” economy businesses are breaking down, forcing investors and strategists to rethink classifications and appropriate valuations. China is at the forefront of this melding of industries, thanks to its pressure on companies to move up the value chain, and a regulatory approach that gives firms a freer hand at innovating new products and services.
“The world has moved too much to ‘new’ and ‘old’” categorisations, says Joshua Crabb, head of Asian equities at Old Mutual Global Investors in Hong Kong. Ping An’s “phenomenal performance” reflects its emergence as a combination of a “boring old” life insurer and a “leading internet company,” he says.
Another star that’s transcended the “boring” classification is China Molybdenum Co., which at one point focused on a metal used to toughen steel, but now enjoys a new-economy style valuation thanks to its holdings of cobalt, which is essential for electric vehicles. Or consider Midea Group Co., a household appliance maker that’s seen its stock soar as it developed smart-home technology and became a leader in manufacturing automation.
The insurer’s stock-market capitalisation climbed $101 billion last year, a gain that Crabb attributes to its investments in online services and bets on rising demand for insurance as China’s middle class expands.
Similar dynamics are driving change in a host of industries, from auto manufacturing to property development, with the application of digital technology such as the internet-of-things revamping the landscape.
“In China we have found a lot of cases where the old or traditional economy starts to adopt new technology to redefine itself,” said Xia Le, an economist in Hong Kong. “The nature of recent technological advances is that they didn’t lead to the rise of new industries, but rather they were applied to traditional industries.”
Chinese authorities have cautiously allowed new businesses to experiment and flourish in sometimes gray areas.