\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 336 New China Life Insurance Company Ltd(601336) )
1. Profit: the net profit attributable to the parent company increased by + 4.6% year-on-year to 14.95 billion, recovering positive growth (2020 – 1.8%) and Q4 single quarter year-on-year – 6.1%, mainly due to the increase of 3.23 billion reserves due to the change of accounting estimates in Q4 single quarter. The 750 day moving average moved downward (year-on-year -20bps to 3.06% at the end of the year), resulting in a total decrease of pre tax profit of RMB 12.1 billion in the provision increase in 2021.
2. Value: NBV increased from – 34.9% year-on-year to 5.98 billion, of which H2 decreased from – 52.3% year-on-year. Nbvmargin rose from – 6.8pct to 12.9% year-on-year, mainly due to the deterioration of product structure caused by the decline of manpower and the weak sales of long-term insurance. The new orders of ten-year and above were – 36.2% year-on-year and – 18.8% year-on-year. In terms of channels, NBV of individual insurance increased from – 35.7% to 5.78 billion year-on-year, but NBV of Bancassurance increased from 52.5% to 500 million year-on-year (mainly due to the improvement of product term structure, new bancassurance long-term insurance orders increased by 9.5% year-on-year, and new bancassurance long-term insurance orders increased by 27% year-on-year).
In terms of manpower, the company continued to clear up the deficiency of manpower. At the end of the year, the scale of individual insurance was 389000, with a year-on-year increase of – 35.8%; The average monthly qualified manpower (marketers with Commission ≥ 800 yuan in the first year of the month) ranged from – 28.9% to 91000 year-on-year, and the average monthly qualified rate ranged from – 4.7% to 19.1% year-on-year; However, the per capita production capacity increased by 4.1% to 2725 yuan.
EV increased by + 7.6% to 258.8 billion compared with the beginning of the year, and the growth rate slowed down. It is mainly dragged down by the negative contribution of investment deviation of 1.4 billion (positive contribution of 8.8 billion in 2020) and the negative contribution of changes in operating assumptions of 3.1 billion; It is expected to be due to the company’s adjustment of surrender rate, continuation rate and other assumptions at the end of the year (the 13-month continuation rate and 25 month continuation rate are – 6.2pct to 83.7%, – 1.1pct. To 83.8% year-on-year respectively, and the surrender rate is + 0.5pct to 2.0%). The contribution created by NBV was -2pct To 2.49%.
3. Investment: the performance of the investment side is brilliant, and the total return on investment is firmly in the forefront of the industry. The return on net investment was 4.3%, year-on-year -0.3pct; The total return on investment was 5.9%, year-on-year + 0.4pct; The total investment income increased by 23.5% year-on-year to 57.6 billion, which is expected to be due to the company’s grasp of the market high point, cashing in the floating profit of some equity assets and contributing 18 billion to the bid ask spread income (11.7 billion in 20 years). The company’s investment assets increased from + 12.1% to 1082.8 billion, mainly with time deposits and equity assets, accounting for + 2.9 PCT. and% respectively+ 2.4pct.， The proportion of bond assets is -5.5pct.
Comments: the core indicators of the company’s liability side in 2021 are lower than expected. We judge that the pressure on the liability side of the company is still large in 2022. It is expected that q1nbv will still decline by more than 30% year-on-year, and the annual decline is expected to narrow to about 25% under the low base. At present, focusing on the “1 + 2 + 1” strategy, the company actively arranges the wealth management and health + pension industry, which is expected to enable product sales and create a new driving force for team development. We estimate that the net profit attributable to the parent company of New China Life Insurance Company Ltd(601336) from 2022 to 2024 will be 16.2 billion, 17.7 billion and 19.9 billion respectively, yoy 8.15%, 9.47% and 12.52% (the net profit attributable to the parent company from 2022 to 2023 was 20.4 billion and 23.7 billion respectively). The reduction of profit forecast mainly takes into account the trend of the yield curve of government bonds in the next 750 days. As of March 2020, the corresponding valuations of 19x shares and 19x shares were 380.29, respectively.
Risk warning: the growth of agents does not meet expectations; The sales of guaranteed products do not meet expectations; The cost investment efficiency is reduced.
