\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 318 Ping An Insurance (Group) Company Of China Ltd(601318) )
Event: Ping An Insurance (Group) Company Of China Ltd(601318) released the annual performance report of 2021, and realized the operating profit attributable to the parent company of 147961 billion yuan, a year-on-year increase of + 6.1%; The annual operating roe reached 18.9%; The net profit attributable to the parent company was 101618 billion yuan, a year-on-year increase of – 29%. The annual dividend per share was 2.38 yuan, a year-on-year increase of + 8.2%.
Comments:
Affected by China Fortune Land Development Co.Ltd(600340) impairment, the decline of net profit attributable to parent company continued to expand in 2021. Net profit attributable to parent company in 2021 was – 29% year-on-year, which was mainly affected by China Fortune Land Development Co.Ltd(600340) impairment (Q4 further increased by 7.3 billion yuan to 43.2 billion yuan compared with the first half of the year) and provision (annual pre tax profit decreased by 22.57 billion yuan). In 2021, the operating profit attributable to the parent company was 147961 billion yuan, a year-on-year increase of + 6.1% (Q3 + 9.2%), of which the operating profit of life insurance and health insurance business was 97.075 billion yuan, a year-on-year increase of 3.6%. The annual dividend was 2.38 yuan / share, a year-on-year increase of + 8.2%.
The value of new business and the number of manpower continue to be under pressure. The pain of channel reform continued. In 2021, NBV increased from – 23.6% year-on-year to 37.898 billion yuan, further increasing the decline compared with – 17.8% in Q3. Among them, the growth rate of new single premium was – 8.5% year-on-year, which further decreased compared with – 4.5% in Q3, and the value rate of new business was – 5.5pct to 27.8% year-on-year, which also decreased by 2.9pct compared with Q3, mainly due to the increase of 8ppts the proportion of savings business and the adjustment impact of expense rate and continuation rate. In terms of human development, we will firmly adhere to the transformation direction of the “three high” team and continuously optimize the structure. In 2021, the company strengthened the efforts to eliminate the deficiency of agents, and the number of individual life insurance agents was Shanghai Pudong Development Bank Co.Ltd(600000) , with a year-on-year increase of – 41.4% and a month on month increase of – 15%. The company continued to promote the layered and refined operation of the agent team, optimized the team structure from “pyramid” to “spindle”, superimposed digital operation, and effectively improved the production capacity. The per capita first year premium of agents was + 22% year-on-year, the number of long-term insurance items per capita increased by 7%, and the proportion of high-end savings type items increased, driving the average FYP of items to increase by 15%. In the future, we will further cultivate a diamond team and provide support for high-end customers and exclusive product resources. In terms of new talent team, we will continue to implement the “excellent +” staff increase and upgrading, increase excellence with excellence, strictly control the entrance, gradually increase the proportion of high-quality new talent and improve the retention rate, and promote the rapid growth of channel premium and NBV in the future.
The comprehensive cost rate of property insurance decreased, and the original premium of automobile insurance resumed growth. The overall comprehensive cost rate (COR) was optimized from 1.1pct to 98% year-on-year, and the underwriting profit increased by 145.7% to 5.136 billion yuan year-on-year, mainly because the comprehensive cost rate of credit guarantee insurance was greatly optimized, from – 19.8pct to 91.2% year-on-year. The original premium income of 4q21 auto insurance increased by 8.7% year-on-year, benefiting from the gradual decline of the impact of the comprehensive reform of auto insurance, and the original premium income of auto insurance returned to the growth track. The comprehensive cost rate of auto insurance remained stable, with a year-on-year increase of + 0.7pct to 98.9%, but the cost structure was improved.
Affected by the fluctuation of capital market and the provision for impairment of investment assets, the investment income declined. In 2021, the total investment income was 144086 billion yuan, a year-on-year increase of – 27.8%, due to the comprehensive impact of capital market fluctuations, downward market interest rates and increased impairment provision. The net return on investment was 4.6% and the total return on investment was 4.0%, respectively -0.5pct and – 2.2pct year-on-year.
Continue to upgrade the medical and health ecological strategy and create a “Chinese version of joint health” model. The company focuses on building a group managed medical model with “HMO + family doctor + o2o” as the core, realizes the closed loop of supply, demand and payment, and provides customers with “worry-saving, time-saving and money-saving” medical and health services. 1) The synergy between the ecosystem and the main business has begun to show, with 227 million individual customers having 3.3 contracts per customer and 40000 AUM per customer. 2) the coverage of medical services and professional doctor teams has been continuously improved. 3) Ping An health, as an important part of the Ping An health ecosystem, has created a Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integrated “medical + health” service platform with members’ exclusive family doctors as the entrance to jointly build a Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integrated and managed medical ecosystem.
Investment suggestion: subject to the complex and changeable macroeconomic and foreign situation in the past year, the continuous challenge of covid-19 epidemic, the continuous deepening of agent channel reform and the transformation and upgrading of product structure, and the combined impact of severe fluctuations in equity investment and thunderstorms of real estate enterprises, the annual NBV growth rate and net profit level are under pressure. Considering: 1) on the human side, we will continue to promote the reform of agent channels, implement the layered and refined operation of agent team, implement the “excellent +” staff increase and upgrading plan, increase the proportion of high-quality agents, and 2) on the product side, we will continue to optimize the guarantee and savings product system, increase the supply of competitive products, launch exclusive guarantee products for different customer groups, and according to the change of customer financial preference and aging trend, Timely launch savings products in line with the characteristics of customers; 3) At the service end, the number of life insurance customers is increased through medical and health services to improve customer stickiness; Relying on the group’s medical and health ecosystem, we will drive the growth of insurance customers and improve customer stickiness through warm services. 4) on the scientific and technological side, we will deepen scientific and technological transformation, continue digital transformation, innovate technology application schemes in marketing, service, risk control and other fields, and enable business development. We expect that the results of team clearing will gradually appear, the downward trend of team size is expected to slow down, and the liability side will usher in marginal improvement. On the investment side, the real estate risk exposure continues to narrow, the credit risk drag of real estate enterprises continues to weaken and release, the impairment on the asset side has been relatively fully accrued, and the broad credit expectation in the future will support the long-term interest rate. The current valuation has reflected pessimistic expectations and it is recommended to pay attention.
Risk factors: the agent’s expansion schedule is not as expected; The reform of life insurance is not as expected; The agent’s production capacity continued to decline and increased; Sharp fluctuations in the capital market have led to a sharp decline in investment income; Downward interest rate will narrow the margin of fixed interest rate instruments and affect accounting profits.
