\u3000\u3000 Ping An Insurance (Group) Company Of China Ltd(601318) (601318)
Core view: the logic of life insurance obtaining excess return under the steady growth policy
(1) first of all, under the policy of steady growth, the reduction of reserve requirement, interest rate and the recovery of infrastructure are good for life insurance. For example, when the Central Bank cuts interest rates, it cuts the short-term interest rate of the money market to promote economic growth, while for economic growth, the long-term interest rate will rise. Who can make money from raising long-term interest rates? Life insurance enterprise! (2) At the same time, economic growth and asset quality will improve. Life insurance companies have taken a lot of real estate assets, and 2021 is the high point of real estate asset risk. If the quality of real estate assets will improve, the life insurance industry will also rank in the top among the industries that benefit the most. Therefore, we believe that under the steady growth policy, life insurance is expected to become one of the main investment lines in the stock market, and there will be excess returns.
Growth resumption: benefiting from the ultra-high market share of serious illness insurance
By 2020, the roe of Ping An Group in recent five years has reached 19%, and the life insurance business is the core contributor. The reason is that Ping An Insurance (Group) Company Of China Ltd(601318) with its ultra-high market share of serious illness insurance, it has walked out of the road of real value development, with stable profits and fast growth. However, the ultra-high market share is naturally unsustainable. With the increase of industry subjects and the diversification of channels, the market share gradually declines. On the other hand, the stock price and the growth rate of new orders are not linear, such as 2016 and 2018. The revaluation of stock insurance policies can also drive the stock price upward.
Competition pattern: international experience proves the sustainability of the group's strategy
Overseas experience has proved that the strategy of exclusive agent can realize the long-term development of guaranteed business. For example, northwest life insurance discussed in this paper, so we believe that the development of Ping An Life Insurance has long-term sustainability. But the outbreak of new single demand is closely related to per capita income α Ultimately, it should come from macroeconomic repair β。
Investment suggestion: pay attention to the revaluation of the value of stock insurance policies, and the target price is 66-72 yuan
In the stage of economic expectation improvement, we assume that the scale of the new order is stable and the corresponding discount is given compared with the high point in 2019. Then, considering the revaluation of the value of the existing insurance policies, we set the target price at 66-72 yuan and maintain the "buy" rating. If the economic expectation is gradually fulfilled in the future, we will further raise the target price of Ping An Insurance (Group) Company Of China Ltd(601318) . We expect the company's earnings per share to be 6.67/7.08/7.94 yuan in 21-23 years, and the profit growth rate will be - 18.22% / 6.22% / 12.15% respectively, maintaining the "buy" rating.
Risk tips
The economic restoration is less than expected; The decline of new orders intensified.
