\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) China Pacific Insurance (Group) Co.Ltd(601601) 601)
Event: the company released its annual report for 2021, with a revenue of 440643 billion yuan, a year-on-year increase of + 4.4%, an operating profit of 35.346 billion yuan, a year-on-year increase of + 13.5%, and a net profit of 26.834 billion yuan, a year-on-year increase of + 9.2%. The group’s embedded value was 498309 billion yuan, a year-on-year increase of + 8.5%, and life insurance nbv134.5% RMB 1.2 billion, with a year-on-year increase of – 24.8%, nbvm23.5% 5%, year-on-year -15.4pct.
Liability side: the income of [life insurance] insurance business was 211685 billion yuan, a year-on-year increase of – 0.1%, which was mainly dragged down by online direct selling and reinsurance reinsurance. The number of agents declined, the production capacity increased, and FYP increased, but the value rate decreased significantly: the average number of agents per month was 525000, with a year-on-year increase of – 29.9%, the monthly per capita insurance business income in the first year was 4638 yuan, with a year-on-year increase of + 42.3%, and the monthly per capita commission income in the first year was 791 yuan, with a year-on-year increase of + 16.3%; Agent channel new business fyp306 RMB 5.7 billion, year-on-year + 6.1%, channel nbv130.5% RMB 7.4 billion, with a year-on-year increase of – 26.0%, nbvm42.0% 6%, year-on-year -18.5pct. The large decline of agent channel nbvm is the main reason for the decline of overall nbvm and NBV of life insurance. Under the continuous pressure of the industry, the company is more inclined to insurance scale between scale and value. Strengthen the construction of Bancassurance channels, and the premium growth rate is bright: the insurance business income was 7.457 billion yuan, a year-on-year increase of + 223.5%. Among them, the new single income was 6.668 billion yuan, a year-on-year increase of + 331.3%. [property insurance] insurance business income was 152643 billion yuan, a year-on-year increase of + 3.3%. The comprehensive cost rate was 99.0%, unchanged year-on-year. The net profit attributable to the parent company of the segment was 6.352 billion yuan, a year-on-year increase of + 21.9%
Asset side: investment assets were 1.81 trillion yuan, with a year-on-year increase of + 10.0%. Fixed income, equity, investment real estate and cash accounted for 75.7%, 21.2%, 0.4% and 2.7% respectively. The net and total investment income were 73.061 billion yuan and 93.184 billion yuan respectively, with a year-on-year increase of + 8.8% and + 10.9%. The increase of total investment income was mainly due to the increase of fixed income investment interest income and securities trading income. The return on net investment and total investment were 4.5% and 5.7% respectively, both of which were -0.2pct year-on-year.
Investment suggestion: the net profit attributable to the parent company is equivalent to 92% of our previous forecast, slightly lower than expected. The company firmly promoted the channel reform, issued the “Changhang partner” plan in 2021 and implemented the new basic law in 2022 to promote the transformation of agents to professionalism and specialization. We predict that the company’s profits from 2022 to 2024 will be 29.07 billion yuan, 32.341 billion yuan and 35.561 billion yuan respectively. Company 2022ep / ev0 40x, lower than the comparable companies Ping An 0.50x and Guoshou 0.58x. It is also at the absolute low of its own valuation in recent five years, maintaining the “Buy-A” rating.
Risk tips: agents continue to fall off, the value rate of new business continues to decline, weak terminal demand, etc.
