Why is the dividend lower than expected? What about the equity market in 2022? How to view the company’s share price?
On the evening of March 28, China Pacific Insurance (Group) Co.Ltd(601601) held the 2021 annual performance conference in Shanghai, and the company’s management responded to the above hot issues one by oneP align = “center” source: screenshot of live broadcast
China Pacific Insurance (Group) Co.Ltd(601601) said that looking forward to 2022, China Pacific Insurance (Group) Co.Ltd(601601) life insurance should promote the new break of Changhang, property insurance should strengthen the construction of underwriting profitability, asset side should strengthen the coordination and linkage with liability side, continue to promote the construction of health industry ecosystem and comprehensively improve the level of scientific and technological empowerment.
confident in bringing long-term returns to investors
On the evening of March 27, China Pacific Insurance (Group) Co.Ltd(601601) issued the announcement of the profit distribution plan for 2021. According to the plan, China Pacific Insurance (Group) Co.Ltd(601601) plans to distribute a cash dividend of RMB 1.0 per share (including tax), which is lower than the market expectation. In the view of the industry, China Pacific Insurance (Group) Co.Ltd(601601) is a fine-tuning of the dividend policy in consideration of the impact of the second generation phase II on the company’s solvency adequacy ratio.
In response, China Pacific Insurance (Group) Co.Ltd(601601) financial director and chief actuary Zhang Yuanhan responded, “In order to ensure that the company continues to maintain a reasonable and sufficient solvency under the framework of the second generation and the second phase of repayment, support business development and layout of new fields, we have preliminarily established a capital plan covering all subsidiaries, formulated relevant response measures, and are promoting the implementation. At the same time, we are also actively studying the space and options for the application of relevant regulatory policies, such as applying for transition period, insurance companies’ non fixed term capital supplementary debt, etc. but generally speaking , in view of the uncertainty in the implementation of these regulatory policies, the company has made appropriate adjustments to the dividend level in 2021 from the perspective of prudence, so as to ensure the implementation of the group’s high-quality development strategy. “
In addition to the second generation phase II project, China Pacific Insurance (Group) Co.Ltd(601601) president fu fan further said that another factor in adjusting dividends is the group’s next strategic layout. “The 14th five year plan of the group was approved last year and is being actively promoted. In terms of strategic layout, we need to support the development of business in the current period and cultivate new economic growth points in the future, so we need to leave some space for the group’s capital utilization.”
Fu Fan stressed that from the perspective of the development process of China Pacific Insurance (Group) Co.Ltd(601601) 30 years, the company has always attached great importance to the reasonable return of investors. From the perspective of the industry, the dividend rate and dividend rate of CPIC have been maintained at a high level for a long time, and the relevant data in 2021 are still in the first echelon of the industry. CPIC will continue to maintain the sustainability and stability of the dividend policy, take into account the sustainable development and meet the regulatory requirements, fully consider the interests of investors and reasonably determine the cash dividend level. The company is confident to bring long-term returns to investors. It should look at the long-term investment value of a company.
at present, there is still room for improvement in the proportion of equity allocation
In the first quarter of this year, A-Shares continued to fluctuate and adjust. In this regard, Fu Fan believes that this also fully reflects the differences of market participants’ views on the future market. “We believe that market adjustment brings more risk release and the manifestation of long-term investment value. As long-term insurance capital, we see opportunities and how to grasp them in time. At present, the proportion of China Pacific Insurance (Group) Co.Ltd(601601) 601 equity asset allocation has a certain room for improvement.”
For the overall performance of the stock market in 2022, Fu Fan said, China Pacific Insurance (Group) Co.Ltd(601601) keep a high degree of caution. Under the guidance of strategic asset allocation, the investment of equity assets will strengthen the disciplinary investment mechanism, strengthen the tactical proportion control, and actively grasp the structural opportunities of the stock market.
If we look at the overall investment strategy, Fu Fan believes that China Pacific Insurance (Group) Co.Ltd(601601) 601 adheres to the characteristics of liabilities, takes meeting the risk control requirements such as the second generation phase II plan as the premise, focuses on maximizing the return of long-term investment, continuously optimizes the diversified asset portfolio matching the risk preference, and unswervingly implements the dumbbell asset allocation strategy.
For the investment in the real estate field concerned by the market, Fu Fan said that by the end of 2021, the total investment real estate of the group was 7.5 billion yuan and the real estate fund was 8.9 billion yuan, accounting for less than 1% (the total investment assets of the group were 1.8 trillion yuan). At present, China Pacific Insurance (Group) Co.Ltd(601601) holding real estate enterprises have strong comprehensive strength in debt repayment and good credit risk control ability. From the perspective of investment strategy in the next step, we will focus more on serving national strategic projects and infrastructure projects in key regions, adhere to Multi Strategy and diversified investment layout, disperse risks, strengthen the role of bottom warehouse of core assets, obtain stable cash flow, grasp the allocation opportunities of trend assets and obtain value-added premium.
current share price is undervalued
Regarding the performance of China Pacific Insurance (Group) Co.Ltd(601601) in the secondary market, Su Shaojun, the Board Secretary of China Pacific Insurance (Group) Co.Ltd(601601) said that the overall performance of the insurance sector in the past year was poor, but judging from the historical data, China Pacific Insurance (Group) Co.Ltd(601601) share price is indeed at an obviously undervalued level.
Su Shaojun said that there are many reasons for the pressure on the stock price. The first is the impact of the repeated epidemic on the industry, the second is the external environmental factors such as the emotional fluctuation of the capital market, and the last is that the insurance industry itself is also undergoing in-depth transformation and value remodeling, “However, in any case, the fundamental factors driving the development of the insurance industry, such as the long-term stability of China’s economy and society, the aging population and the innovation of social security mechanism, have not been shaken. China’s insurance market is still one of the most dynamic markets in the world. At present, compared with developed countries, China’s insurance depth and density are still relatively low, and there is still much room for development.”
“Of course, what is most closely related to the performance of the stock price is the fundamentals of the company.” Su Shaojun said that from the perspective of the company itself, it is still necessary to work in a down-to-earth manner, maintain strategic concentration, always grasp the main line of high-quality development, focus on the main business of insurance and refine the insurance profession. At present, the company’s fundamentals are solid and stable. In the long run, including adhering to the transformation, scientific and technological layout and actively building the second growth curve of health and elderly care, will lay the foundation for the future value growth of the company.
