\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 318 Ping An Insurance (Group) Company Of China Ltd(601318) )
Key investment points
Event: Ping An Insurance (Group) Company Of China Ltd(601318) disclosed in the 2021 annual report on March 17 that the group’s revenue and net profit attributable to the parent decreased by 3.1% and 29% year-on-year to RMB 1.18 trillion and 101.6 billion respectively, the group’s operating profit attributable to the parent (OPAT), EV and dividend increased by 6.1%, 5.1% and 8.2% year-on-year, the life insurance NBV was – 23.7% year-on-year, the group’s total return on investment was 4%, the dividend distribution was slightly higher than expected, and the net profit performance was weak.
The number of new customers continued to decline, and 43.2 billion yuan China Fortune Land Development Co.Ltd(600340) impairment has been withdrawn throughout the year
1. In 21 years, Ping An Group’s new customers decreased by 12.5% to 32.4 million year-on-year, and Internet channels accounted for 35.8%. At the end of 21 years, the proportion of Ping An Internet users converted into customers decreased by 0.62pct to 31.82% year-on-year, and the proportion of customers holding multiple accounts increased by 123pct to 89.26 million year-on-year, and the operation of customers was flat;
2. The OPAT of the group increased by 6.1% year-on-year to 148 billion yuan, of which the OPAT of life insurance, property insurance, banking, asset management and technology were 3.5%, 0.2%, 25.6%, 9.4% and 19.5% respectively,
A. the operation of property insurance was poor in the fourth quarter, OPAT decreased by 43% year-on-year in that quarter, and the comprehensive cost rate deteriorated from 97.3% in the first three quarters to 98% in the whole year. It is expected that the operation of automobile insurance and liability insurance is weak;
B. the annual net profit of the trust in the large asset management business decreased by 91% to 230 million yuan. The statement shows that the trust sector has an investment income loss of 1.51 billion yuan and an asset impairment of 1.15 billion yuan;
C. The OPAT growth rate of 19.5% in the science and technology business is basically consistent with the profit trend of its main subsidiaries. Lujin Institute is the profit focus of the science and technology sector. The net profit for the whole year of 21 increased by 36% to 16.8 billion yuan year-on-year, and the loss range of good doctors increased by 590 million yuan to 1.54 billion yuan;
3. The Group continues to increase the impairment of China Fortune Land Development Co.Ltd(600340) with a total impairment of 43.2 billion yuan (including 15.9 billion yuan of equity and 27.3 billion yuan of creditor’s rights) at the end of the year, which is 7.3 billion yuan more than the mid-term report of the year 21. At present, the impairment coverage of China Fortune Land Development Co.Ltd(600340) has reached 80%, and the annual net profit after tax has been 24.3 billion yuan;
4. The net investment and total return on investment of the group in 21 years are 4.6% and 4.0%. If the impairment effect of China Fortune Land Development Co.Ltd(600340) is removed, the total return on investment will be 5.2%; At the end of the year, real estate investment accounted for 5.5% of the group’s insurance capital investment exposure, while equity, creditor’s rights and property accounted for 26.3%, 27.1% and 46.6% respectively;
5. The effective tax rate of the group for 21 years decreased by 3.6pct to 12.7% year-on-year, which is mainly due to the fact that the effective tax rate of life insurance business under IFRS 9 is close to 0. The low effective tax rate of life insurance is due to the low pre tax profit affected by investment, and the tax-free income such as treasury bonds and fund dividends exceeds 25% of pre tax profit;
The data of life insurance agents continued to decline, and the negative deviation of operation was large;
1. The NBV of Ping An Life Insurance decreased by 23.6% to 37.9 billion yuan in the past 21 years, of which the premium and value ratio of new policies were – 8.5% and – 5.5% respectively year-on-year. On the one hand, the decline in value ratio was due to the company’s reduction in the continuation rate and expense rate at the end of 21, which affected the product value ratio of 1.8pct; on the other hand, the product structure changed, and the proportion of guard products with return clauses with low value ratio in long-term guarantee products increased;
2. The data of life insurance agents is still weak. The total manpower at the end of the year is – 41.4% to Shanghai Pudong Development Bank Co.Ltd(600000) people year-on-year. Considering that the activity rate has decreased by 2.3pct to 47% year-on-year, the absolute number of monthly average active manpower has decreased by 44.1% to 281000 people year-on-year, and the average monthly income of agents has decreased slightly by 0.6% to 5758 yuan / month; According to our understanding, one of the difficulties of Ping An’s manpower this year is that the number and income of old agents with more than 2 years of experience have begun to decline significantly. Old agents are the core of business development and staff increase. The other is that the staff increase rate has declined significantly since last year;
3. Ping An’s stock insurance policies in the past 21 years were poorly operated, which was reflected in the fact that the withdrawal difference reached 29.3 billion yuan, which reduced the remaining marginal balance by 2.03% year-on-year and dragged down the growth rate of EV by 2.03 ppts;
4. Since March, Ping An has mainly promoted the “product + service” combination of “increased lifetime life + home-based elderly care”. The total premium has reached a certain threshold, and customers whose premium is a new lifetime product (yixiangshijia / yixiangyannian / yixiangnian / zengyebao / Shengshi Jinyue) can obtain the qualification of home-based elderly care. Ping An will be equipped with online private housekeeper and daily life, entertainment, medical treatment and other services. We expect the value rate of the new product to be about 50%, There will be pulse increment at the initial stage of launch, but the follow-up business still needs team support. We expect that the NBV of Ping An Life Insurance in 22 years will be about – 25% year-on-year;
Investment suggestion: the annual report of Ping An 21 basically meets the expectation. Affected by the equity market adjustment at the beginning of the year, we slightly adjusted the EV growth rate of Ping An Group in 22 years to 9.15% (the previous value was 9.4%); The recent marginal changes in real estate policy have eased the market’s concern about the real estate exposure risk on its asset side. If the marginal effective narrowing of the NBV decline of Ping An Life Insurance in 22 years is conducive to its valuation close to ev. The current stock price corresponds to 0.575 times of PEV in 22 years, maintaining the buy rating;
The growth rate of life insurance agents is not as good as the expected growth rate of the group’s long-term equity restructuring, and the training of new insurance agents is not as good as the expected growth rate of the group’s equity, which indicates that the growth rate of the group’s long-term equity restructuring is not as good as the expected growth rate of the group’s equity, and there is no significant decline in the long-term risk;
