\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 318 Ping An Insurance (Group) Company Of China Ltd(601318) )
[the liability side of 2022q1 is still weak; however, the base pressure has weakened since March, and the subsequent negative growth is expected to narrow gradually. The highlight of the annual report is that although the team size has declined sharply, the increase in the proportion of high-quality agents has led to stable production capacity.]
Core indicators: Group EV + 5.1% year on year, operating profit + 6.1% year on year; NBV of life insurance was – 23.6% year-on-year, and ev of life insurance was + 6.3% year-on-year. NBV met expectations and ev was slightly lower than expected.
1. Overall: the group’s operating profit was + 6.1% year-on-year, in line with expectations. The growth rates of each sector are: Life Insurance and health insurance (+ 3.5%), property insurance (+ 0.2%), banking (+ 25.6%), trust (- 91%), securities (+ 22%), other asset management (+ 46%), and Technology (+ 19%).
Net profit attributable to parent company was – 29% year-on-year, of which – 50.1% in Q4 single quarter was mainly due to China Fortune Land Development Co.Ltd(600340) impairment provision (24.3 billion after tax net profit attributable to parent company, year-on-year after excluding – 12%) and high base in the same period last year (high increase in investment income driven 20q4 single quarter + 102%).
2. Life insurance: agent, premium and value are under overall pressure. NBV was – 23.6% year-on-year, of which Q4 was – 60.5% year-on-year, and the new single premium (year-on-year – 8.5%) and margin (year-on-year – 5.5pct) decreased. Our judgment stems from: 1) the company adjusted the assumption of expense rate and surrender rate at the end of the year, resulting in the decline of value rate. Excluding the impact of hypothetical adjustment, NBV in the whole year was – 18.6% year-on-year; 2) The product structure was adjusted, and the proportion of savings increased 8pct, It is expected to be caused by the increase in the sales of long-term annuity insurance and all risks insurance for seriously ill customers. Affected by the epidemic situation, the decline of manpower and the impact of benefiting the people, the new orders of long-term guarantee products were – 46.2%; Due to the adjustment of assumptions and the slight decline of the value rate of the new version of serious diseases, the long-term guaranteed margin was -9.3pct year-on-year To 86.7%.
The scale of agents has shrunk significantly, but the decline of production capacity is much better than the scale. At the end of the year, there were Shanghai Pudong Development Bank Co.Ltd(600000) agents, a year-on-year increase of – 41.4%; The agent activity rate was 47.0%, down 2.3pct. In terms of production capacity, new orders per capita were + 22% year-on-year, NBV per capita was – 4.1% year-on-year, and the proportion of agents with college degree or above increased by + 2.4pct. We judge that the adjustment of the structure of the life insurance team is gradually taking effect. Among the lost manpower, low production capacity is the main, and the proportion of high-quality manpower is increasing.
The pre tax operating profit of life insurance was + 5.2% year-on-year, mainly due to the lower growth rate of residual marginal amortization (only + 1.1% year-on-year). The remaining marginal balance turned negative for the first time compared with – 2% at the beginning of the year, which was mainly due to the negative growth of new business contribution (year-on-year – 37%) and the difference in withdrawal (from – 1.5 billion in 2020 to – 29.4 billion). The 13-month continuation rate and 25 month continuation rate were + 0.8pct year-on-year respectively- 2.8pct.。
EV of life insurance increased by 6.3% year-on-year, 2.6pct slower than that in 2020; ROEV11. 1%, year-on-year -3.4pct, the contribution created by NBV decreased from 7.0% to 5.0%, and the negative increase superimposed on “operation deviation + change in operation assumptions” expanded to – 22.6 billion (a total of – 14.1 billion last year), accounting for – 2.7% of EV at the beginning of the period. In addition, the negative deviation of investment was – 24.9 billion, which was mainly caused by China Fortune Land Development Co.Ltd(600340) impairment provision and the impact of capital market fluctuations.
3. Property insurance: operating profit was + 0.2% year-on-year, and cor decreased by 1.1pct to 98%, better than expected. The expense ratio decreased by 7.6% and the loss ratio increased by 6.5%. In terms of insurance types: 1) affected by the fee reform and the flood in Henan, the car insurance cor increased by + 0.7% to 98.9%, but the market share increased by 0.5% to 24.3%; 2) Guarantee insurance cor was significantly optimized – 19.8% to 91.2%; 3) Liability insurance cor deterioration + 10.5% to 105.1%.
4. Technology: the operating profit of the parent company was + 37% year-on-year, and the total revenue was + 10% year-on-year to 99.3 billion. Among them, the net profit of lufax was 16.8 billion, a year-on-year increase of + 36%, mainly driven by the guarantee fee income (providing credit enhancement for its loans); The net loss of good doctor increased by 590 million, mainly due to the increase of management fee investment after the strategic transformation; Financial one account reduced losses by 70 million.
5. Investment: the return on net investment was 4.6%, with a year-on-year rate of -0.5pct; The total return on investment was 4.0%, with a year-on-year increase of -2.2pct. The total investment income was – 27.8% to 144 billion yuan, mainly due to: 1) China Fortune Land Development Co.Ltd(600340) related asset impairment provision totaled 43.2 billion yuan, including 15.9 billion yuan for equity and 27.3 billion yuan for creditor’s rights; 2) In 2020, fenggao cashed in the income of some fvpl equity assets, contributing 43.4 billion bid ask spread. Affected by market fluctuations, it was only 14.4 billion in the same period in 2021. In terms of asset allocation, it mainly allocates debt funds (accounting for + 1PCT.), Investment property (+ 0.9pct.) Non standard (+ 0.7pct.) And unlisted equity (+ 0.6pct.), Underwritten bonds (- 1.7pct.) And shares (- 1.4pct.).
Comments: Ping An Life Insurance‘s liability side is in the transition period, and the decline in the size of the team has an impact on the value of the liability side; However, the company improves the team structure by replacing the old with the new, and the overall production capacity is gradually increasing; The liability side of 2022q1 is still under pressure, and the NBV is expected to have a year-on-year ratio of about – 35%, but it has been slightly repaired since March. The increased lifetime “Shengshi Jinyue” has promoted the double-digit positive growth of NBV in that month. Superimposed on the significant decline of the base since March last year, the negative growth of NBV in the second half of the year is expected to be significantly narrowed. At present, the market has been fully pessimistic about the liability side. Once there is marginal improvement, the superposition asset side repair logic will continue to be realized, which is expected to usher in the valuation repair market. At present, the company’s a / h corresponding to 2022pev is 0.55/0.59 times, and the valuation is at the lowest level in history.
Risk tip: the long-term interest rate fell more than expected; The growth of agents did not meet expectations; The progress of life insurance reform is less than expected
