\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 628 China Life Insurance Company Limited(601628) )
1. The net profit attributable to the parent company (RMB 15.2 billion) was – 46.9% year-on-year, mainly due to the high profit base in the same period last year and the aggravation of the stock market shock this year (Q1 CSI 300 and Hang Seng state-owned enterprise index changed by – 14.5% and – 8.63% respectively in 2022; they changed by – 3.1% and + 2.2% respectively in the same period last year). In 2022q1, the company’s annualized return on total investment was 3.88%, with a year-on-year rate of -2.56pct; The annualized return on net investment was 4.00%, year-on-year -0.08pct; The total book investment income decreased by 31.6% year-on-year to 44.6 billion, and the book floating profit narrowed from 50.3 billion to 21.7 billion. The net assets attributable to the parent company of the group changed by – 2.8% from the beginning of the year to 465.1 billion yuan. We expect that it is mainly due to the increase in the impairment of dividend blue chips.
2. NBV of life insurance was – 14.3% year-on-year, which is expected to lead the listed peers. The company’s Q1 new single premium was 100.9 billion, a year-on-year increase of – 1.5%, basically the same as last year. We expect that it is mainly due to the company’s continuous promotion of savings products such as Xinyu Zunxiang and Zhenxiang Chuanjia. New orders for long-term insurance in the first year were 66.15 billion, with a year-on-year increase of – 3.9%, including 65.37 billion new orders for the first year, with a year-on-year decrease of – 4.3%, which was significantly improved compared with last year. The first-year premium for 10 years and above was 19.16 billion, with a year-on-year increase of – 2.8%, accounting for 0.4pct To 29.2%, with a slight improvement in business quality; The premium of short-term insurance was 34.74 billion yuan, a year-on-year increase of + 3.5%. However, due to the decline of the scale of agents, the difficulty of the company in selling long-term guaranteed products has increased, and nbvmarkin has decreased compared with the same period last year. We expect the company to turn to health insurance sales in the future, and the margin will increase compared with Q1.
3. The manpower scale increased slightly. By the end of the year, the recruitment process of the company had been simplified, and the total number of online salesmen was expected to be – 84000, which was basically stable by the end of the year. At present, the company’s manpower has initially seen signs of stabilization, and the base pressure in the second half of the year is small.
Investment view: 1. The growth rate of NBV in the quarterly report is expected to lead the industry, the signs of stabilizing the manpower scale have been shown, and the core index NBV slightly exceeded expectations. Since this year, the margin of the company’s new single premium has improved, mainly driven by the sales of savings products, and will turn to the sales of health insurance in the future. After March, the base pressure decreased, and the decline of NBV of the company is expected to be further narrowed, and it will maintain the leading position in the industry throughout the year. We estimate that the net profit attributable to the parent company in 20222024 will be 37.3 billion, 50.5 billion and 61.6 billion respectively, and yoy will be – 26.8%, 35.5% and 21.9% respectively (the previous estimate of net profit attributable to the parent company in 20222024 will be 57.4 billion, 64.5 billion and 72.3 billion respectively). The reduction of profit forecast is mainly due to the intensification of stock market turmoil this year and the reduction of the expectation of return on investment. At present, the company’s 2022pev is only 0.52 times, which is at the lowest valuation in history. It is optimistic about the excess return opportunity brought by the company’s leading peers on the liability side under the background of asset side valuation repair of the follow-up insurance sector.
Risk tip: the rapid decline of interest rate exceeded expectations, the decline of agent scale exceeded expectations, the sales of guaranteed products were less than expected, and the epidemic situation was repeated.
