\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 628 China Life Insurance Company Limited(601628) )
Events:
In 2021, China Life Insurance Company Limited(601628) operating revenue was 858.51 billion yuan, a year-on-year increase of + 4.1%; The net profit attributable to the parent company was 50.92 billion yuan, a year-on-year increase of + 1.3%; The weighted average return on net assets was 11.0%, year-on-year -0.9pct; The value of new business was 44.78 billion yuan, a year-on-year increase of – 23.3%; The embedded value was 1.2 trillion yuan, up + 12.2% from the beginning of the year; The dividend per share was 0.65 yuan, a year-on-year increase of + 1.6%.
Comments:
The reform continued to deepen, the total manpower was – 39.0% year-on-year, and the annual premium achieved positive growth. The company consolidated high-quality development and continued to compact the team size. By the end of 2021, the total sales manpower of the company was 890000, with a year-on-year decrease of – 39.0%, an increase of 2.3pct compared with the first three quarters, of which 162000 were lost in Q4 single quarter, including 160000 in personal insurance sales; At the same time, based on the caliber of total sales manpower, the company’s per capita handling fee and commission increased by 27.7% year-on-year to 74000 yuan / person in 2021, with a growth rate of 5.3pct compared with the first three quarters. With the continuous loss of agents, the company’s 21q4 premium income was 64.89 billion yuan, a year-on-year increase of – 5.6%, but the annual premium income was 618.33 billion yuan, still achieving a positive growth of 1.0%.
New orders fell, nbvm was under pressure, and NBV was – 23.3% year-on-year. In 2021, the company’s new policy premium income was 175.86 billion yuan, a year-on-year increase of – 9.3%, of which 21h2 was – 12.1% year-on-year, with a growth rate of 3.7pct lower than 21h1; In 2021, the first year premium paid by the company was 98.41 billion yuan, with a year-on-year increase of – 14.7%, of which the first year premium paid for ten years and above was 41.68 billion yuan, with a year-on-year increase of – 26.1% and 21q4 with a year-on-year increase of – 39.0%. The growth rate was 26.8 PCT lower than that of 21q3. It is estimated that due to the loss of agents, the uncertain economic situation outside China and the repeated regional epidemic, the sales of complex high-value products are relatively weak, and the annuity insurance products with stable income but low value rate are becoming more and more popular. In 2021, the nbvm of the company’s personal insurance sector (calculated according to the first year’s premium) decreased from – 6.3pct to 41.6% year-on-year, superimposed with the decline of new orders, resulting in the NBV of the company decreased by 23.3% year-on-year to 44.78 billion yuan in 21 years, The decline was 3.7 PCT larger than that in the first three quarters of 21 years. We expect that with the continuous deepening of the company’s “integrated and diversified” sales layout, the effectiveness of marketing system reform will gradually appear, the strategies of “great health” and “great pension” will be steadily promoted, and the performance is expected to pick up.
The net return on investment was + 0.04pct year-on-year, and the total return on investment decreased slightly. The company continued to increase the allocation of long-term bonds, and the contribution of investment income of associates and joint ventures increased. In 2021, the net investment yield was 4.38%, year-on-year + 0.04pct, which was basically stable compared with 4.40% in the first three quarters, but the total investment yield decreased slightly by 0.32pct to 4.98%.
21q4 net profit was – 23.9% year-on-year, but achieved a positive growth of 1.3% in the whole year. In 2021, the company’s overall operation was stable, with a net profit attributable to the parent company of 50.921 billion yuan, a year-on-year increase of + 1.3%, a decrease of 1.7pct compared with the first three quarters, of which the net profit attributable to the parent company of 21q4 was 2.42 billion yuan, a year-on-year decrease of – 23.9%, but a decrease of 30.6pct compared with 21q3. It is estimated that the decline in net profit in a single quarter is mainly affected by the pressure on the liability side and the decline in investment income (21q4 premium year-on-year – 5.6% and total investment income year-on-year-on-year – 6.4%). Under the influence of the update of the traditional insurance reserve discount rate assumption, the changes in the reserves of relevant insurance contracts will reduce the company’s pre tax profit of 38.28 billion yuan in 2021, dragging down the growth of annual net profit.
Profit forecast and rating: with the continuous deepening of the transformation of the company’s agent team and the gradual realization of “improving quality and stabilizing quantity”, it is expected that the growth rate of new business value is expected to rebound in the future. Considering the decline of the company’s net profit attributable to the parent company in 21q4 and the possible impact of the uncertainty of the economic situation outside China on the investment side, we lowered the forecast of the company’s net profit attributable to the parent company from 2022 to 2023 by 14.3% / 4.7% to 83.42/103.3 billion yuan, and increased the forecast of net profit attributable to the parent company in 2024 by 117.6 billion yuan. At present, the company’s share price is maintained at 22.0/h/year, with the corresponding rating of “pea / 0”.
Risk warning: the premium income is less than expected; The epidemic situation repeats on a large scale; Interest rates fell faster than expected
