\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 318 Ping An Insurance (Group) Company Of China Ltd(601318) )
Event: the company disclosed that in the first quarterly report of 2022, the group realized an operating profit of 43.047 billion yuan, an increase of 10.0% year-on-year; The net profit attributable to the parent company was 20.658 billion yuan, a year-on-year decrease of 24.1%. The difference between net profit and operating profit (OPAT) is mainly due to the fluctuation of short-term investment (- 19.715 billion yuan) and the change of discount rate (- 2.613 billion yuan). The operating profit of the company’s life insurance, property insurance, banking, asset management and technology segments increased by 16.0%, – 41.1%, 26.8%, 10.5% and 4.1% year-on-year, accounting for 67.5%, 7.0%, 17.3%, 6.0% and 6.4%.
Key investment points
The epidemic repeatedly dragged down the growth of value, the reform of life insurance continued to deepen, and the operating profit exceeded expectations. Impacted by the distribution of Omicron variant strains across the country, 1q22 company achieved a year-on-year decrease of 33.7% (the year-on-year decrease of comparable caliber is about 25%, which is a more cautious actuarial assumption adjusted at the end of 2021). From the perspective of attribution, FYP decreased by 15.4% year-on-year, and margin decreased by 6.8 PCT. to 24.6% year-on-year, but the decline has been significantly narrowed in March. The company’s strategic deployment around the two wheel drive of “channel + product”: in terms of channel +, the company promoted the hierarchical and refined operation of the team. At the end of the period, the number of agents decreased by 10.4% to 538000 compared with the beginning of the year, and the proportion of agents with college degree or above increased by 3.5 percentage points year-on-year; In terms of products +, the company builds differentiated competitive advantages through three core services of “insurance + health management”, “insurance + high-end elderly care” and “insurance + home-based elderly care”. 1q22 “insurance +” NBV contribution has exceeded 1 / 3. The better than expected growth rate of life insurance OPAT is mainly due to the recovery of deviation contribution under more conservative assumptions.
Seasonal factors drag down the underwriting profit of property insurance. The original insurance premium income of 1q22 Ping An Property Insurance reached 73.018 billion yuan, with a year-on-year increase of 10.3%, and the comprehensive cost rate was 96.8%, with a year-on-year increase of 1.6 PCT., which is still significantly better than that of the same industry. The operating profit of property insurance decreased by 41.1%, which was mainly due to the comprehensive impact of the sharp fluctuations in the equity market, the drag on investment income and the increase in the proportion of insurance policies after the comprehensive reform of auto insurance. We believe that due to the seasonal impact, the performance of property insurance is expected to improve significantly in the second half of the year.
Under the sharp fluctuation of the equity market, the balance sheet is more robust, and the comprehensive financial stability advantage appears. 1q22 company’s annualized net / total investment return on insurance assets was 3.3% / 2.3%, with a year-on-year rate of – 0.2 / – 0.8 PCT. Compared with other listed companies, the net assets attributable to the parent company at the end of the listing period decreased from the beginning of the year. The net assets attributable to the parent company of 1q22 increased by 2.6% from the beginning of the year to 833515 billion yuan, and the comprehensive income attributable to the parent company of 1q21 was 25.829 billion yuan, a year-on-year decrease of 26.0%. It has been disclosed that the comprehensive income attributable to the parent company of listed peers has changed from positive to negative, It is mainly because Ping An has implemented the new accounting standards for financial instruments and the “change in fair value of other equity instrument investment” in other comprehensive income is positive (mainly because 1q22 fvoci’s position shares outperform the general trend and are relatively strong), highlighting the company’s comprehensive financial stability advantage.
Profit forecast and investment rating: objectively speaking, it is not easy for the company to achieve stable operating profit growth under the environment of large fluctuations in the external market, highlighting the robustness advantage of comprehensive finance and the solid and reliable strength of the balance sheet. Previously, we have considered the impact of the decline in the equity market since the beginning of the year on the net profit. We maintain the profit forecast and predict that the net profit attributable to the parent company from 2022 to 2024 will be 142.8 billion yuan, 157.6 billion yuan and 171.9 billion yuan. As of April 29, the share price corresponding to P / EV from 2022 to 2024 was 0.54, 0.50 and 0.47 times respectively. Considering the valuation cost performance, the “buy” rating was maintained.
Risk tip: the equity market fluctuated sharply, the effect of life insurance reform was lower than expected, and the recovery of demand for guaranteed products slowed down.
