\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 628 China Life Insurance Company Limited(601628) )
Event: the company released its 2021 performance, with a revenue of 858505 billion yuan, a year-on-year increase of + 4.1%, and a net profit attributable to the parent company of 50.921 billion yuan, a year-on-year increase of + 1.3%. Weighted average roe10 97%, year-on-year -0.86pct. The group’s embedded value was 1.20 trillion yuan, a year-on-year increase of + 12.2%, nbv447.5% RMB 800 million, with a year-on-year increase of – 23.3%, and nbvm41.5% for individual insurance 6%, year-on-year -6.3pct.
Liability side: the total premium was 618327 billion yuan, a year-on-year increase of + 1.0%. According to the types of insurance, the total premiums of life insurance, health insurance and accident insurance accounted for 77.8%, 19.5% and 2.7% respectively, with a year-on-year increase of + 0.1%, + 4.8% and – 1.1% respectively. The growth rate of health insurance was the highest. We judged that the main reason was the tide of “speculation and suspension” before the implementation of the new regulations on serious diseases; According to the payment period, the total premiums of renewal, first-year regular payment, short-term insurance and single payment accounted for 71.6%, 15.9%, 0.3% and 12.2% respectively, with a year-on-year increase of + 5.8%, – 14.7%, – 12.5% and – 1.0% respectively. Due to the decline of manpower, the spread of epidemic and weak terminal demand, the first-year premiums decreased significantly, and the renewal premium supported the growth of total premiums; By channel, the total premiums of individual insurance, bancassurance, group insurance and other channels accounted for 82.4%, 8.0%, 4.7% and 4.9% respectively, with a year-on-year growth rate of – 0.3%, + 19.6%, + 1.0% and – 2.4% respectively. The growth rate of Bancassurance channel is bright, mainly due to the growth of per capita production capacity of this channel. At the end of the year, there were 820000 individual insurance agents, a year-on-year increase of – 40.5%, 25000 bancassurance account managers, a year-on-year increase of – 13.8%, and 45000 group insurance sales personnel, a year-on-year increase of – 11.8%.
Asset side: net and total investment income of 188770 billion yuan and 214057 billion yuan, with year-on-year + 16.0% and + 7.8%, net and total investment income of 4.38% and 4.98%, with year-on-year + 4bp and – 32BP. Investment assets amounted to 4.72 trillion yuan, a year-on-year increase of + 15.1%. Cash and deposits, creditor’s rights, equity and other assets accounted for 12.8%, 57.6%, 14.8% and 14.8% respectively. Sources of investment income: 1) seize the window of H121 high interest rate and allocate long-term assets; 2) Flexibly adjust the equity portfolio and actively lock in the income; 3) The investment income of associates and joint ventures was + 23.9% year-on-year.
The “Life Insurance +” comprehensive financial ecosystem has developed well: the premium income of shoudaichan business is 21.107 billion yuan, and the number of insurance policies is + 18.0% year-on-year; The net profit of Guangdong Development Bank was 17.476 billion yuan, a year-on-year increase of + 26.5%. The overall health layout continued to deepen.
Investment suggestion: the net profit attributable to the parent company is lower than our expectation, mainly because the premium income is lower than our expectation. The premium showed negative growth in the first two months of 2022, and the scale bottoming under the loss of agents is still in progress. Company 2022ep / ev0 58x, which is at the lowest level in recent five years. We believe that the negative expectation is reflected in the valuation and maintain the buy-b rating.
Risk tips: agent shedding exceeded expectations, epidemic spread exceeded expectations, terminal demand continued to decline, etc.
