Ping An Insurance Group Becoming High Yield 8% Dividend Stock- PE Ratio @Amazing 6.3 Times Earnings.

I try to make this a short post to reflect my current thoughts and my latest stock purchase addition into my investment portfolio. For the past 2 months, I have been seriously contemplating on whether I should increase my investment stakes in China equities that has been badly beaten down. 2 of these on my target list are (i) Alibaba (which I already held 1,500 shares) and (ii) Ping An Insurance Group. But the uncontrollable downward spiralling of China stock prices and the deflationary local environment there makes me extremely nervous and puts me off whenever I try to muster enough courage to click on the "Buy" button on my trading App.

1. Rainbow Amidst the Current Thunderstorms.

China has been in a bear market for the past 3 years and every week it keeps getting lower. Many fellow retail investors who are holding onto China listed companies have been burnt by the worsening economic conditions. I have been holding on to my remaining 1,500 shares of Alibaba stocks for 1-2 years. The good news is that recently, there were encouraging signs (as well as various rumors) that the China Government will come up with a more substantial rescue package to boost its equities market. 

2. Buy Now Or Wait For Further Official News Announcement?

I thought that the sensible thing would be to wait for official news confirmation before buying into China equities to prevent a wild goose chase and confirm that we are nearing the end of the market capitulation stage. However the usual adage of high risk high return applies, so I decided to start deploying some investment funds into either Alibaba or Ping An Insurance Group.

3. Makes More Sense to Diversify into Ping An Insurance Group Instead of Alibaba.

Many renowned China listed companies are now trading at fire-sales pricing. Hence I decided to diversify my China holdings and buy into Ping An Insurance Group. The latter has been badly beaten down recently when rumours surfaced that Ping An will need to do "National Service" to rescue Country Garden. Its management team has since came out to vehemently deny that the CCP has instructed it to inject funds into the troubled developer which is facing imminent bankruptcy if things do not improve.

At a dividend yield of 7.8%-8% and PE of 6.3 times, the established Ping An Insurance Group looks like an ideal candidate for both capital growth and high dividend yield return investment.

[P.S: Saying that, note that its Revenue and Net income for the past few years (2020-2023), seems to be declining and showing indicative red-flags about its ability to withstand the current local economic downturn albeit the decline in share price is substantially more than the financial results]. 

Ping An's 9mths 2023 Results against 2022

Parting thoughts

I am currently vested in a small stake of 500 shares of Ping An at around HKD34 a share. Will add on more shares if there are better news being released in the coming months ahead.