\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 336 New China Life Insurance Company Ltd(601336) )
Matters:
New China Life Insurance Company Ltd(601336) released the annual report of 2021, and realized the net profit attributable to the parent company of 14.9 billion yuan (YoY + 5%) in 2021. The total premium of life insurance is 163.5 billion yuan (YoY + 2%), and the total new orders is 46.6 billion yuan (YoY + 0.1%); EV reached 258.8 billion yuan (YoY + 8%), and the remaining margin was 226 billion yuan (yoy-0.5%). The company plans to pay an annual cash dividend of 1.44 yuan per share (including tax), totaling about 4.5 billion yuan (including tax), accounting for 30.1% of the net profit attributable to the parent company
Ping An View:
The total number of new orders was basically flat, but the business structure callback was significant. The continuous decline of nbvm led to the decline of NBV. The company’s total new orders (first year term payment of long-term insurance + short-term insurance) in 2021 was 46.6 billion yuan (YoY + 0.1%). 1) From the perspective of channels, new individual insurance policies are under pressure, develop regular payment business and improve the structure of bancassurance business. In 202, new individual insurance and bancassurance policies were 18.5 billion yuan (yoy-12%) and 25.2 billion yuan (YoY + 9%) respectively, of which new long-term insurance policies were – 5% and + 27% year-on-year respectively, and single premium was + 31% and + 4% year-on-year respectively. 2) In terms of insurance types, the first-year premium of new health insurance policies and long-term insurance with a ten-year term and above decreased, resulting in the decline of nbvm and NBV. In the first year of long-term insurance premium in 2021, the health insurance business is only 8.4 billion yuan (yoy-19%), and the ten-year and above business is only 6.1 billion yuan (yoy-36%). It is expected that the sales of new and serious diseases products will be under pressure and the product structure will be corrected. In 2021, nbvm was only 13% (yoy-7pct), NBV was only 6 billion yuan (yoy-35%), and nbvm was only 21% (yoy-12pct) after excluding bancassurance single payment
The agent team continues to be clean and promote channel transformation. As of the end of the year, the average number of qualified personnel (yopcy-1.39 million, yopcy-1.4%) and the average qualified rate of manpower (yopcy-1.39 million, yopcy-1.4% only). Affected by the reduction of team size, the monthly average per capita comprehensive capacity passively increased to 2725 yuan (YoY + 4%).
We continued to allocate long-term interest rate bonds, actively grasped structural opportunities, and the rate of return on investment increased steadily. In 202, the total return on investment was 5.9% (YoY + 0.4pct), the net return on investment was 4.3% (yoy-0.3pct), and the estimated comprehensive return was 5.0% (yoy-1.7pct).
Investment suggestion: the transformation of the life insurance industry is at the bottom, and the inflection point is not yet reached. The company’s agent team declined, new order sales were under pressure, business structure callback was obvious, and nbvm and NBV were still under pressure. We adjusted the assumptions of new orders, nbvm and reserves. The predicted EVPs in 2022 and 2023 were adjusted from 96.57 yuan, 108.11 yuan to 92.31 yuan and 102.40 yuan respectively, and the predicted EVPs in 2024 was 113.3 yuan. The current share price corresponds to about 0.37 times of PEV in 2022, maintaining the “neutral” rating.
Risk tips: 1) the equity market fluctuates greatly, β Property led to increased volatility of the sector market. 2) The number of agents continued to decline, the quality improvement was less than expected, and the new orders fell more than expected. 3) The interest rate is lower than expected, and the allocation of maturing assets and new assets is under pressure.
