I last looked at Ping An shares a year ago (link here) observing back then that I preferred the more pure insurance exposure at AIA rather than the mixed insurance/banking exposure of Ping An. How have they performed in the interim? Well actually in the Chinese stock market run of a few months ago the more cyclical/Chinese economy sentiment linked Ping An actually did better:
Looking at the recent Ping An numbers they were actually quite impressive with a good control of costs...
...and despite a double digit rise in both loans and deposits the capital ratios showed no headline signs of deterioration.
So what to think? Well my previously noted caution regarding banking exposure of course inevitably remains and at a price:book of over x3 supported by a c. 15% return on equity there is not natural value. For me I still prefer the still growth-y but less immediately risky business model of AIA. Still quite impressive underlying metrics I do admit on cost control and growth.
As for the global distribution entity Li & Fung (last written up amazingly two years ago on Financial Orbit - link here) the shares have continued to fall - well the troubled Wal-Mart (as we noted here) is still their largest client:
Looking through the presentation document what struck me was the tough/disruptive retail environment and 'global sourcing moving out of China'...
...as shown by the leveraged fall in operating profit.
So, interesting (and not unexpected) colour on the world. As for Li & Fung shares I am not particularly compelled given the tough market they are in even though any uplift in global trade / Asian growth hopes should benefit them. Additionally at a sub 30% gearing level the current 6%+ yield should have somes sustaining scope even in the current macroeconomy. I would much rather buy a sub book priced Cathay Pacific as outlined in part one.