\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 336 New China Life Insurance Company Ltd(601336) )
Event: New China Life Insurance Company Ltd(601336) 2021 achieved operating revenue of 222.4 billion yuan (YoY + 7.7%), and net profit attributable to parent company of 14.9 billion yuan (YoY + 4.6%). We believe that the focus of the company’s 2021 annual report includes: (1) NBV fell by 35% and its performance was lower than expected. The company’s new long-term insurance payment orders increased by 4% year-on-year, the new regular payment orders over ten years decreased by 36.2% year-on-year, and nbvm decreased to 12.9% (yoy-6.8pt.), NBV fell 35% year-on-year, lower than its peers. (2) The scale of agents was reduced to 390000, and the per capita production capacity increased slightly. Affected by the epidemic and other factors, the number of agents fell off significantly, and the number of agents fell to 389000 (yoy-36%) by the end of 2021. The average monthly qualified manpower is 91000 (yoy-28.9%), and the per capita comprehensive production capacity is 2725 yuan (YoY + 4.1%). (3) The investment performance was stable and the proportion of equity increased. The annual total return on investment of the company is 5.9% (YoY + 0.4pct.), The net return on investment is 4.3% (yoy-0.3pct.), Among them, the share base accounts for 15.5% (YoY + 0.9pct.).
NBV declined significantly, and nbvm needs to be improved. In 2021, the company achieved a premium income of 163.5 billion yuan (YoY + 2.5%), of which 41 billion yuan (YoY + 5.0%) was paid for long-term insurance, of which the premium paid for ten-year and above decreased by 36% year-on-year. Affected significantly by the epidemic, the company balanced its product structure and attached importance to the role of Bancassurance channels. Bancassurance long-term insurance and single payment were 27% and 3.8% year-on-year respectively. The premium of new policies with a term of more than 10 years fell, and the proportion of low value rate policies increased, which led to the further decline of nbvm to 12.9%, driving NBV to decline by 35% year-on-year, and the overall performance was weaker than expected.
The scale of agents has fallen off significantly, and the per capita capacity has improved. Affected by factors such as manpower loss caused by the epidemic, the number of agents of the company fell to 389000, a year-on-year decrease of 36%. Affected by the obstruction of exhibition industry during the epidemic, the average monthly qualified manpower reached 91000 (yoy-29%), and the average monthly per capita comprehensive production capacity was 2725 yuan (YoY + 4.1%). The scale of qualified manpower of the company gradually stabilized and rebounded.
The investment income was stable and the proportion of equity increased. By the end of 2021, the company’s investment assets reached 1082.8 billion yuan (YoY + 12%), realizing a total return on investment of 5.9% (YoY + 0.4pct.), The net return on investment is 4.3% (yoy-0.3pct.). Among them, due to the impact of asset maturity and increased risk control of non-standard assets, the proportion of trust plans decreased by 2.6%, the equity allocation increased significantly by 2.4%, and the share proportion increased by 0.9%.
EV increased by 7.6% year-on-year, and its performance was lower than expected. By the end of 2021, the company’s embedded value had reached 258.8 billion yuan (YoY + 7.6%), of which the contribution of new business value was 5.98 billion yuan (yoy-35%), the deviation of economic experience was – 1.44 billion, and the change of operating assumptions was – 3.1 billion. It was mainly affected by the 13-month continuation rate of personal insurance, which fell by 6.2pct To 83.7%.
Investment suggestion: buy – a investment rating. It is estimated that the EPS of New China Life Insurance Company Ltd(601336) 20222024 will be 6.4 yuan, 7.8 yuan and 8.7 yuan respectively, corresponding to 0.4 times of 2022pev, and a 6-month target price of 44 yuan will be given.
Risk warning: due to the impact of the epidemic, the premium income of new policies has fallen sharply / the risk of a large number of agents falling off / the uncertainty of regulatory policies / the risk of sharp fluctuations in the secondary market
