Foreigners Love This Stock That China Investors Seem to Hate www.bloomberg.com

Few Chinese companies divide the stock market like Ping An Insurance Group Co.

The largest Chinese insurer by market value is 2018’s most popular mainland stock among foreign investors, who have net bought 16.1 billion yuan ($2.4 billion) of its Shanghai-traded shares, according to Bloomberg calculations. That’s more than for any other company via trading links between Hong Kong and the mainland.

On the other hand, it’s being ditched in Hong Kong by Chinese investors. They’ve sold more Ping An shares there than any other company this year apart from Tencent Holdings Ltd., and they’re also selling onshore. Ping An’s Hong Kong-listed shares are down 6.7 percent in 2018 versus the Hang Seng Index’s 7.3 percent decline, while its mainland-traded A shares have fallen 10 percent compared with a 18 percent drop in the CSI 300 gauge.

“Views are diverging between mainland and foreign investors toward Ping An,” said Steven Lam, a Hong Kong-based analyst at Bloomberg Intelligence. “Many foreign investors not only value the stock as an insurance company, but a fintech player.”

Ping An said last year it aimed to eventually get half its earnings from technology, a development that could make investors rethink their valuation methodology on a traditional-economy stock. The company’s stock-market capitalization climbed $101 billion last year, partly thanks to its investments in online services.

Analysts seem to side with foreigners. The stock has no sell ratings and their average price target implies it will climb at least 30 percent in both Hong Kong and Shanghai over the next 12 months from Monday’s close.

“It’s the best Chinese financial company to institutional investors,” said Vincent Hsu, a Taipei-based fund manager at Fuh-Hwa Securities Investment Trust Co., who has been buying shares over the past few months. “Lots of foreign investors are buying Ping An, as the stock ranked top in the criteria valuing a company’s business, investment and capital.”

Ping An’s management has repeatedly said the share price doesn’t fully reflect the value of the company, which spans insurance, banking and asset management. The conglomerate reported a 34 percent net profit increase in the first half, helped by a jump in fintech and health-care business.

Ping An’s shares on the mainland have been cheaper than those in Hong Kong since June. Its yuan-denominated securities trade at 9.6 times forward 12-month earnings, while its H shares are at about 10.5. By contrast, technology shares on the CSI 300 Index trade around 21.8 times.

“The fact that Ping An’s A shares aren’t substantially more expensive than H shares is a reflection of the hesitation for domestic investors to give more credit to its fintech story,” said Daiwa Capital Markets Hong Kong Ltd.’s Leon Qi, the only analyst who doesn’t rate Ping An a buy.

The combined stake of mainland investors in Ping An’s Hong Kong-listed shares is close to a one-year low, while foreign investors hold the most A shares since at least March 2017, according to Bloomberg calculations based on exchange data.

Chinese investors may have chosen to sell liquid heavyweight companies such as Ping An as general sentiment turned against Hong Kong stocks and there was a rush to exit, said Christine Wu, vice president at Yuanta Securities Investment Trust.

Hengsheng Asset Management Co. fund manager Dai Ming echoed Qi’s views on fintech doubts. “It’s still a bit early to say Ping An’s tech ambition will be realized,” he said. “Conglomerates like Fosun also have such ambitions to develop fintech, but the results haven’t been very satisfying.”

Earnings of Ping An’s online lending platform Lufax could slow, Shanghai-based Dai said. He remains bullish on Ping An though, mainly because of its advantage in the insurance business. It is the only Chinese insurer that managed to keep new business value growing this year while other life insurers were more affected by tightening measures, he said.

“The divergence between China and foreign investors is a result of two different investment styles,” Dai said. “Mainland investors tend to value a stock based on a shorter-term outlook.”

Mongolia earns 55 mln USD from crude oil exports to China www.xinhuanet.com

ULAN BATOR, Sept. 3 (Xinhua) -- Mongolia has exported most of its crude oil production this year to China, adding 55 million dollars to the state exchequer, the Ministry of Mining and Heavy Industry said on Monday.

Mongolia has fuel reserves for only 38 days www.news.mn

The price of fuel have been increasing since January, 2018. For example, the most common used fuel in Mongolia, A-92, is currently being sold at MNT 1820. As for 28 August, our country has oil reserves for approximately 38 days; A-80 for 119 days, A-92 for 25 days, diesel for 38 days and TC-1 aviation fuel for 28 days.

Capacity of Mongolia-China border checkpoints to be improved www.montsame.mn

Ulaanbaatar /MONTSAME/ A meeting between the Mongolian Customs General Administration and a customs administration of Inner Mongolia Autonomous Region of China was held on August 31.

‘Coal Mongolia-2018’ conference kicks off www.montsame.mn

The 8th ‘Coal Mongolia’ international coal trade and investment conference commenced at the conference hall of Shangri La Hotel.
About 600 representatives from 15 countries are attending the conference being organized jointly with China’s coal market research company ‘Fenwei Energy Information Services’.
Organizers highlighted that the collaboration with China’s most reputable company promotes the growth of Chinese transport, logistics, trade companies and investors, who are interested in buying coal from Mongolia.
This year’s conference features with the discussion of issues, including development of competitiveness and improvement of exportability.
The bests of the coal industry will be announced at the banquet of the ‘Coal Mongolia-2018’ conference. Mining Minister D.Sumiyabazar and other officials will present awards to the companies.

Peabody’s mine site in Australia rehabilitated two years early www.mining.com

The Australian division of coal miner Peabody (NYSE: BTU) announced this week that its rehabilitation efforts to turn the Millennium mine site into grazing land will be completed two years ahead of schedule.

China blocks access to Australian Broadcasting Corp sites www.bbc.com

China has blocked access to the website of Australia's national broadcaster, the Australian Broadcasting Corp (ABC).

South Korea's POSCO to invest $40bn over next five years www.asia.nikkei.com

SEOUL (Reuters) -- South Korean steelmaker POSCO said on Monday that it plans to more than double its investment spending over the next five years to 45 trillion won ($40.4 billion), as it looks to strengthen its competitiveness.

FRC approves IPOs for Ard Daatgal and Mandal Daatgal www.gogo.mn

The Financial Regulatory Commission registered 25 million shares of Ard Daatgal, valued at 200 MNT per share, and 6.2 million shares of Mandal Daatgal, valued at 1,000 MNT per share.

Alibaba vows more help for innovators www.chinadaily.com

Chinese e-commerce giant Alibaba Group vowed to enable more entrepreneurs in Africa who have ideas and practical knowledge gained from China's innovative businesses to accelerate the development of e-commerce platforms on the continent.

Empowering entrepreneurs from Africa is in line with the company's commitment to support entrepreneurs from Africa and help them to succeed in the digital world, said Song Juntao, vice-president of Alibaba Global Business Group.

The sharing of technologies and access to insights and experience will help cultivate more African talent and young entrepreneurs, which in turn will benefit the company's long-term development in African countries, he said.

Jessica Wang, North China business director of Hays, a global specialist recruitment agency, noted that e-commerce in China has grown rapidly, and Chinese companies are expanding continually with innovative and large-scale projects that can impact the industry.

Companies like Alibaba have become global names, Wang said.

The company has been holding intensive training sessions for African entrepreneurs on e-commerce innovations in recent years－for example, its Global E-commerce Talent program for university teachers, which was launched by the company's business school in Rwanda last month. It was the first time the program had been offered in Africa.

As part of the company's commitment to support education and e-commerce on the continent, the program aims to deepen the understanding of the e-commerce industry among Rwandan university teachers and to train individuals to compete in the digital economy. To date, 52 African entrepreneurs from 14 African countries have participated in the fellowship.

The company has also launched a new initiative－the Netpreneur Prize－for African entrepreneurs in South Africa. It aims to build a community of 100 young African entrepreneurs by 2030 who will receive grants totaling $10 million.

AliExpress is currently available to anyone with an internet connection in many African countries, while the company also facilitates African exports to China.

Since Alibaba entered the African market, more than 4.2 million African customers have purchased Chinese products through AliExpress.

In South Africa alone, some 100,000 residents purchased Chinese products through AliExpress in 2017, with the revenue witnessing year-on-year growth of 32 percent and order volume growing 48 percent.

Clothing, wigs, automobiles, motorbikes, sports products, computers, mobile phones, jewelry and health products are among the top purchases, it said.

Tmall, an online shopping platform of Alibaba, now sees orders from countries including Morocco, Egypt, Algeria, Mauritius and South Africa, covering sectors including maternity and infant products, cosmetics, household items, hiking, home and textile products and healthcare products.

African drums, Moroccan hair conditioner, black tea soap, football jerseys from Algeria and stuffed elephant toys have been well received by Chinese customers.