Ping An invests in smart cities as it transitions into tech
Ping An has pledged 1% of revenue to expand its tech business, which now includes smart city projects in 100 cities
Ping An Insurance (Group), China’s largest insurer by market value, has set its eyes on the country’s smart city projects to bolster its transformation into a technology-driven financial conglomerate while taking on established technology giants.
Mature technologies used to build a smart city will be fully developed and expanded to various mainland cities next year as the company looks to secure a front runner position in the segment nationwide, said Yu Ning, head of Ping An’s technology entrepreneurs division, in an interview with South China Morning Post.
“Our ultimate goal is to develop core technologies that can be copied and expanded in various cities,” he said. “We will carefully assess the market conditions and client demand to do our research and promote our services.”
A “smart city” uses technology to improve efficiency in government agencies for a more sustainable urban environment.
Ping An, pledging to invest at least 1% of its annual revenue, or about 10 billion yuan (US$1.39 billion), to expand technology businesses, began developing smart city technologies at the beginning of 2018.
Yu, responsible for making strategies for Ping An’s technology development and coordinating efforts during the development process, said the group had secured smart city projects in more than 100 mainland cities and was chasing an expansion in business scale.
In a typical case, Ping An’s technologies are utilized to manage local government’s fiscal system and monitor risks in fund flows.
Ping An’s massive investment in technologies has paid off over the past few years. In the first half of this year, revenue from its technology units jumped 34% from a year ago to 38.4 billion yuan.
Operating profits from the segment dropped 29% to 3.27 billion yuan in the same period.
The company said the decline in operating profits resulted from additional investment in research and development.
Ping An reportedly plans to list three other technology start-ups following the successful debut of its medical services unit, Ping An Health Care and Technology, better known as Ping An Good Doctor in April last year.
The three technology firms include financial technology business Lufax, financial solutions provider OneConnect and Ping An HealthKonnect.
Ping An Good Doctor, which raised HK$8.77 billion in Hong Kong in an initial public offering, saw its shares 653 times oversubscribed by retail investors.
In June, the online health care company launched “Private Doctor,” a family doctor service, to target the nation's more than 100 million middle-class families.
It also offers the One-minute Clinic service, under which a patient makes a voice communication with the “AI Doctor” who completes the whole process of health consultation and issues intelligent prescription.
Yu also said that Ping An would strengthen its research and development in online education services amid the financial conglomerate’s further diversification into technologies.
In technology, the company will face competition from much larger rivals such as Alibaba Group Holding, owner of the Post and Tencent Holdings.
(Abacus is a unit of South China Morning Post, which is owned by Alibaba.)