Zhongan Online Sees a Loss of 750 Mn in H1 2022 though with an Increased Revenue

Financials Author: Jiawei Wu Jul 21, 2022 06:09 PM (GMT+8)

ZhongAn Online suffered a decrease in profit but an increase in revenue in H1 2022.

Zhongan insurance

On the evening of July 20, China's first Internet insurer Zhongan Online (Chinese:众安在线, 6060:HK) issued an interim profit warning that in the first half of 2022, Zhongan Online is expected to record a net loss of about USD 96.07 million to USD 110.85 million, after earning a total original premium income of about USD 1.55 billion, up 6.9% year-on-year. 

This was caused by two main factors: first, the capital market downturn in the first half of this year; second, the appreciation of the U.S. dollar against the yuan in the first half of this year.

Zhong An Online, featured with the participation of the three giants in finance and technology, Jack Ma, Ma Huateng and Ma Mingzhe, as well as the support of the then-rising SoftBank, had an offer price of USD 7.61 in 2017, which soon rose to USD 12.46. However, the company's current price is USD 2.51 per share, about a third of the prospectus one. 

Several major international banks have reacted quickly to this profit-to-loss warning. Credit Suisse lowered its target price for Zhong An Online by 18% from USD. 3.82 to USD 3.12, maintaining a "neutral" rating; Daiwa lowered the same one by 31.9% from USD 5.99 to USD 4.08 but maintained a "Buy" rating.

The firm’s competitors include Ping An(Chinese: 中国平安, 2318: HK), PICC(Chinese: 中国人保,2328: HK) and CPIC(Chinese: 中国太保, 2601: HK). 

As of press time, Zhong An Online closed at HKD 22.35 apiece, with a total market value of HKD 27.15 billion.