\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) China Pacific Insurance (Group) Co.Ltd(601601) 601)
Performance overview
In 2021, 601 net profit attributable to the parent company was 26.834 billion, a year-on-year increase of + 9.2%; The operating profit attributable to the parent company was 35.346 billion, a year-on-year increase of + 13.5%; NBV134. 1.2 billion, a year-on-year increase of – 24.8%; EV nearly 0.5 trillion, a year-on-year increase of + 8.5%.
Core concerns
1. Life insurance: the decline of NBV is in line with expectations, and the transformation will help navigation in the future
(1) NBV: the annualized new policy premium of life insurance was 57.119 billion, with a year-on-year increase of 24.4%, but nbvm decreased significantly, from 38.9% to 23.5%, with a decrease of 15.4pt, which exceeded the expectation, and finally led to the decline of NBV. From the perspective of new single premium, the agent channel decreased slightly by 0.2%, of which the regular payment business was + 11.6% year-on-year, reaching 24.761 billion, the bancassurance channel broke out, and the new insurance was 6.668 billion, year-on-year + 331.3%, and the group insurance also grew steadily, reaching 13.011 billion, year-on-year + 19%. From the perspective of value ratio, the adjustment of business structure is the main reason for the decline of nbvm. It is speculated that the proportion of savings products in the medium and short term has increased greatly. Although these products have contributed to the premium and stabilized the scale, the decline in value rate is greater, pulling down NBV.
(2) team: in 21 years, the average monthly scale of the agent team was 525000, with a year-on-year decrease of – 29.9%, the average monthly active manpower was 274000, with a year-on-year decrease of – 36.8%, and the activity rate was 52.1%, with a year-on-year decrease of 5.7pc. The decline of activity manpower is higher than that of the overall scale of the team, which shows that the team transformation of CPIC life insurance is still in continuous adjustment and pain. However, from the perspective of the number of top achievers (MDRT level) of the team, it increased by 170.1% year-on-year, which shows a slight sign of good reform. The promotion of Changhang action requires determination and patience. In his speech in the annual report, Mr. Kong Qingwei, chairman of Taibao, made it clear that the period of rapid transformation of the external environment is a critical moment to test the transformation and determination of the enterprise. Taibao’s gene of “positive response and active change” will inject strong impetus into the long-term development of the company in the future.
2. Property insurance: overall robust, non vehicle quantity and quality increased, slightly exceeding expectations
In 21 years, the total premium of CPIC property insurance was 152643 billion, with a year-on-year increase of 3.3%, and the comprehensive cost rate was 99%, which was basically the same. In terms of auto insurance, affected by the comprehensive reform, the premium decreased by 4%, and the comprehensive cost rate increased by 0.8pc to 98.7%; In terms of non vehicles, the quantity and quality increased simultaneously, the premium was + 16.9% year-on-year, the underwriting turned loss into profit, and the cost ratio decreased by 2.4pt to 99.5%, slightly exceeding expectations. The growth of non vehicle premium mainly comes from the rapid growth of health insurance (year-on-year + 37.3%), liability insurance (year-on-year + 24.6%) and agricultural insurance (year-on-year + 19.8%). The decline of cost rate mainly comes from the optimization of quality structure and fine control of health insurance and liability insurance.
3. Investment: the scale of assets increased steadily and the yield decreased slightly
In the 21st year, the investment assets of CPIC group amounted to RMB 1.8 trillion, with a year-on-year increase of 10%. Among them, the proportion of equity assets increased by 2.4pc to 21.2%, mainly due to the increase in the allocation of stocks, unlisted equity and derivative financial assets. The net return on investment was 4.5% and the total return on investment was 5.7%, both of which decreased by 0.2pc year-on-year. The duration of CPIC fixed income assets is 7.1 years, with a year-on-year increase of 0.9 years. It is speculated that the duration gap will be further narrowed.
4. Dividends: the amount and rate of dividends decreased, lower than expected
CPIC’s dividend per share for 21 years was 1.0 yuan, a year-on-year decrease of 23.1%, and the dividend ratio based on net profit was 35.9%, a year-on-year decrease of 15pc, lower than expected. The decrease in dividends is mainly due to the company’s prudent consideration. On the one hand, the second generation has increased its capital requirements for the company, and the permission for the transition period has not been determined. On the other hand, new businesses such as medical and health care and technology are still in the stage of capital investment, so it is necessary to reserve corresponding capital to cultivate new businesses. We believe that Taibao adheres to the long-term principle and makes a forward-looking layout for the future, which is conducive to the improvement of capital return in the long run.
Profit forecast and valuation
China Pacific Insurance (Group) Co.Ltd(601601) implement the transformation of “long voyage action”, adhere to value orientation and long-term ism, be determined, patient, determined and capable to achieve the success of reform. It is estimated that the year-on-year growth rate of China Pacific Insurance (Group) Co.Ltd(601601) net profit attributable to parent company from 2022 to 2024 will be 11.7% / 13.0% / 17.7%. The current price corresponds to 0.40/0.36/0.32 times PEV from 2022 to 2024. Maintain the target price of 35.2 yuan, corresponding to pev0.5 yuan of 2022e group 63 times, maintaining the “buy” rating.
Risk tips
The progress of reform has been slow, the economic environment has deteriorated, the long-term interest rate has fallen sharply, and the real estate risk has expanded.
