PING An Insurance (Group) Co., the world’s second-largest insurer by market value, is undervalued by as much as 45 percent, a senior executive at the company said.

    The US$94 billion company, whose businesses span insurance, banking and asset management, is trading 25 percent to 45 percent below analyst estimates using a sum-of-the-parts valuation, according to chief insurance business officer Lee Yuan Siong.

    Lee said that while integrated finance companies have fallen out of favor in developed markets, the “conglomerate discount” applied to Ping An has been excessive as China’s booming Internet usage makes it easier for the insurer to acquire new clients and cross-market products.

    “The conglomerate discount has been too big and significantly underestimates the real value of Ping An,” Lee said. “If the market can evaluate us more reasonably and fairly, our market value should increase quite a lot.”

    It’s rare for executives at Asian companies to comment publicly on their valuations. Yet Lee’s bullish view on Ping An shares is shared by analysts, who assign it the highest consensus rating among regional insurers valued at US$10 billion or more. The average price target of HK$51.41 (US$6.63) is 26 percent above Monday’s closing price.

    Ping An trails only Warren Buffett’s Berkshire Hathaway Inc. in market capitalization. Its shares have fallen 5.1 percent this year in Hong Kong, compared with a 7.5 percent gain in the benchmark Hang Seng Index.

    The shares are trading at a price-to-earnings ratio of 10.4, about one-third of the level of Hong Kong-listed insurer AIA Ltd. and lower than the average price-to-earnings ratio of 16 for Asian insurers. Its ratio of share price to embedded value, a gauge commonly used to value insurers, is 1.06, compared with 1.22 for the group. (SD-Agencies)