\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) China Pacific Insurance (Group) Co.Ltd(601601) 601)
Key investment points
Event: China Pacific Insurance (Group) Co.Ltd(601601) disclosed in its 2021 annual report on March 27 that the group's annual revenue and net profit attributable to its parent company increased by 4.4% and 9.2% year-on-year to 440.6 billion yuan and 26.8 billion yuan respectively, the group's OPAT and ev increased by 8.5% and 13.5% year-on-year respectively, the NBV of life insurance decreased by 24.8%, the property insurance cor remained unchanged at 99% year-on-year, the group's comprehensive return on investment was 5.4%, and the dividend ratio was 35%. The overall performance met market expectations;
The negative actuarial impact such as surrender has not been reflected, and the investment income is better than that of peers
1. In the change of life insurance EV, the change of model assumptions has a positive pull of 0.98pct. We expect that it is mainly due to the increase of the proportion of income tax exemption in investment income from the past 16% to 20%. Compared with Guoshou and Ping An, the actuarial assumptions of surrender rate and expense rate have been greatly adjusted, resulting in the negative change of model changes, and the risk release of CPIC is not sufficient;
2. CPIC group and life insurance OPAT increased by 13.5% and 9.2% year-on-year respectively, higher than the market expectation. The calculation method of OPAT of CPIC is different from that of Ping An. Ping An Life Insurance OPAT only deducts the impact of discount rate and short-term investment fluctuation, but retains the impact of actuarial assumption adjustment (we expect that the actuarial assumption adjustment of Ping An in 21 years will have a negative impact on pre tax operating profit of 4.86 billion yuan), while the OPAT of CPIC deducts all the impact of accounting changes;
3. Affected by the sharp decline in the core solvency of life insurance under the second generation and phase II rules, the dividend ratio of CPIC group has decreased from 50% in the past to 35%. We believe that the dividend ratio of 35% will be normalized;
4. CPIC property insurance performed well, with the comprehensive cost rate unchanged from 99% in 20 years. The non auto insurance business realized underwriting profit under the condition of poor industry performance, and the adequacy ratio of outstanding claims reserve was significantly increased to 39.4%;
5. The comprehensive return on investment of CPIC group reached 5.4%, which was better than the performance of peers. The group significantly added 4.6pct to 22.1% of interest rate bonds and local government bonds with tax-free effect, and the asset duration increased by 0.9 to 7.1 years year on year, so as to reduce the reinvestment risk of life insurance;
The performance of life insurance is poor, and the team continues to adjust
1. The NBV of CPIC life insurance decreased by 24.8% year-on-year to 13.4 billion yuan in 21 years, of which the nbvmarkin decreased significantly by 15.4pct to 23.5%, which is mainly due to the low value rate of Xinxiang Shicheng, which has been in good luck in 21 years. The main products launched by CPIC in 21 years include "Xinxiang Shicheng", a short-term reserve in January, the "best of both worlds" of "all risks" from April to may, the "worry free insurance" of consumer serious diseases in August and the "good things in pairs" of "all risks with lifelong serious diseases" in September, In the first half of the year, the sales of two products were good. In the past 22 years, the current focus was on the serious illness of hejiahuan, but the serious illness market had passed the peak, and the promotion effect of Taibao was general;
2. With the help of Taibao home and other high-end customer business platforms, Taibao's extremely high performance manpower (CG manpower, similar to MDRT) increased by 170.1% year-on-year, but the agent expansion at the top of the pyramid is not widely representative. The overall agent team of Taibao continued to adjust, and the average number and performance rate of agents in 21 months decreased by 30% and 5.7pct to 535000 and 52.1% year-on-year respectively;
3. The new basic law promoted in November of 21 has not been effective for the time being. We believe that the core reason is that the requirements of the new basic law are more stringent, and the proportion of agents who can really obtain and benefit is low. In addition, the variable cost has been greatly reduced by 60% - 70%. Taibao is unable to carry out the business competition and sudden increase of staff in the past, resulting in the decline of the business platform;
Investment suggestion: To sum up, the performance of CPIC's 21st Annual Report is generally stable, but life insurance continues to be under pressure. Based on the current situation of the agent team, we believe that CPIC life insurance will continue to make in-depth adjustment in 22 years, which will affect its residual marginal release, add actuarial assumptions, insufficient risk release, and the fluctuation of the equity market since the beginning of the year, We predict that the EV revenue and net profit of Taibao in 22 years will reach 414.5 billion yuan and 23.6 billion yuan respectively from - 5.9% and - 11.9% year-on-year (the former value is 4% and 16.4% to 443.9 billion yuan and 31.8 billion yuan), the group's embedded value per share will increase by 6.03% to 54.92 yuan year-on-year (the former value is 10.5% to 58.09 yuan year-on-year), and the PEV corresponding to the current stock price is 0.41 times, maintaining the buy rating;
Risk tip: the sales of new long-term guarantee orders fell sharply, the yield of long-term treasury bonds continued to decline, and the promotion of agent capacity transformation was not as expected;
