\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 336 New China Life Insurance Company Ltd(601336) )
[event] New China Life Insurance Company Ltd(601336) released the report for the first quarter of 2022: 1) the company's operating revenue reached 75 billion yuan in the first quarter, a year-on-year increase of - 7.9%. 2) The net profit attributable to the parent company reached 1.34 billion yuan, a year-on-year increase of - 78.7%. 3) The net assets attributable to the parent amounted to 101.9 billion yuan, down - 6.1% from the beginning of the year. 4) The weighted roe was 1.28%, with a year-on-year increase of -4.86pct.
The significant year-on-year decrease in net profit attributable to the parent company was mainly due to the decrease in investment income. 1) Premium: the first year premium of long-term insurance in the first quarter was 21.1 billion yuan, a year-on-year increase of - 2.9%. Among them, the regular premium was 8.6 billion yuan, a year-on-year increase of - 18.3%; The premium for ten years and above was 880 million yuan, a year-on-year increase of - 63.3%. 2) Individual insurance channels: the first year premium of long-term insurance in the first quarter was 5.8 billion yuan, a year-on-year increase of - 22.6%. Among them, the regular premium was 5.6 billion yuan, a year-on-year increase of - 20.9%. 3) Bancassurance channel: the first year premium of long-term insurance in the first quarter was 15.2 billion yuan, a year-on-year increase of + 8.4%. Among them, the regular premium was 3 billion yuan, a year-on-year increase of - 13.3%. 4) We believe that the continuous impact of the epidemic and the loss of personal insurance manpower are important reasons for the continuous pressure on personal insurance channels. With the gradual clearing of personal insurance manpower to reality, the pressure on personal insurance channels is expected to be alleviated.
Investment: investment assets increased slightly compared with the beginning of the year; Affected by the fluctuation of the equity market, the total return on investment decreased significantly. 1) The investment assets reached 1096.1 billion yuan, up + 1.2% from the beginning of the year. 2) The annualized return on total investment was 4.0%, year-on-year -3.9pct. 3) AFS floating profit fell sharply to - 450 million yuan from 7.47 billion yuan at the beginning of the year. The decrease in floating earnings was also the main reason for the month on month decline in net assets.
The phase II rules of the second generation of compensation have been officially implemented, and the core solvency adequacy ratio of Xinhua is expected to be at the average level of the same industry. The adequacy ratio of New China Life Insurance Company Ltd(601336) core solvency under the phase II rules is 144%, 99 percentage points lower than that in the phase I rules at the beginning of the year; The comprehensive solvency adequacy ratio was 240%, slightly lower than that at the beginning of the year.
The valuation is still low and the rating of "better than the big market" is maintained. The current share price corresponds to 2022epev0 33x, we believe that New China Life Insurance Company Ltd(601336) it is expected to enrich the development momentum of the company at the three main levels of products, services and brands by continuing to focus on the main business of life insurance, jointly developing a healthy ecology, intensively cultivating pension service finance, and adhering to the development strategy of two wheel drive of assets and liabilities. Given 0.45 times of 2022 PEV, the target price is 40.25 yuan (originally 0.5 times of 2022epev, the target price is 44.72 yuan), the valuation is still low, and the rating of "better than the big market" is maintained.
Risk tip: the long-term interest rate tends to decline; The growth of guaranteed products was lower than expected.
