Chart of the Week: Ping An Insurance and AIA Shares Long-Term Winners

In times of market uncertainty or volatility, diversification of business streams can be a valuable asset. That is particularly true in Hong Kong right now as the market grapples with months of protests that look like they will continue for a while yet.

While the Hang Seng Index is pretty much flat over a one-year period (eking out a gain of just 0.2%), two of the biggest components of the benchmark index have comfortably outperformed; Ping An Insurance Group Co (SEHK: 2318) and AIA Group Ltd (SEHK 1299). They both racked up returns of around 25% over the past year.

This outperformance also continued during the protests with Ping An and AIA shares up 7.2% and 4.7% since the protests began on 9 June, compared to a negative -1.6% return for the benchmark Hang Seng Index over that period.

What’s interesting for investors is that, unlike companies that are in the public eye and susceptible to politicisation, both are selling services that are deemed essential – life insurance. While Ping An focuses solely on China, AIA has a strong business presence in Hong Kong and the wider Asian region.

However, AIA also has a robust and fast-growing local China business which means, for those Mainland Chinese tourists not travelling to Hong Kong to buy insurance, there will still be those staying put and purchasing it from the company in China. For investors, it’s a timely reminder to “stay calm and keep investing” for the long term.

Ping An Insurance and AIA Group shares long-term investing

Source: CapIQ as of 13 September 2019



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