\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) China Pacific Insurance (Group) Co.Ltd(601601) 601)
Event: the company disclosed that in the first quarter report of 2022, the net profit attributable to the parent company was 5.437 billion yuan, a year-on-year decrease of 36.4%; The return to parent comprehensive income changed from positive to negative to 5.234 billion yuan, and the reduction of investment income is the core drag.
Key investment points
CPIC life insurance: the epidemic has impacted the exhibition industry, but the business and team development are improving month by month. Affected by the distribution of Omicron mutant virus all over the country, the offline exhibition industry of the team was impacted. The new single premium of 1q22 agent channel was 9.219 billion yuan, a sharp decrease of 44.1% year-on-year. In terms of attribution, the average monthly manpower fell sharply by 53.4% year-on-year, but the monthly per capita insurance business income in the first year increased by 19.9% year-on-year; The improvement in the quality of the team is mainly due to the increase in the scale of core manpower month on month, the per capita production capacity of core manpower has increased year on year, and the traction effect of the "core" Basic Law implemented at the beginning of the year has gradually appeared. The company continued to adjust and disclose the channel caliber of the 2021 annual report. The contribution of new orders of individual insurance / bancassurance / group channels was 32.5% / 38.8% / 28.7% respectively, while that of 1q21 was 70.9% / 3.9% / 25.2% in the same period. The company partially adjusted the channel structure and restarted bancassurance channels to focus on strategic channels, but did not change the basic index of individual insurance, which is still the main value contribution. We expect that the NBV of 1q21 company decreased by more than 40% year-on-year, and it is expected to improve marginally in the second quarter, The decline of China Daily is expected to narrow significantly. According to the summary of solvency report, CPIC life insurance realized a net profit of 3.59 billion yuan, a year-on-year decrease of 33.1%, which was mainly due to the fluctuation of equity market. The company's single quarter total / comprehensive return on investment was only 0.91% / - 0.26% respectively, which was the main drag on the current operating performance, and the roe in the reporting period was 3.6%. The core solvency adequacy ratio of CPIC life insurance was 147%, far higher than the minimum requirement of 50% and the previous simulation calculation of 107%.
CPIC property insurance: underwriting has improved slightly, and investment is still a drag. 1q22 CPIC property insurance realized an insurance business revenue of 49.864 billion yuan, a year-on-year increase of 14.0%, of which the year-on-year growth rate of auto insurance / non auto business was 11.8% / 16.2% respectively, and the growth rate of auto insurance led the top three (PICC: 10.9%, Ping An: 10.4%). The overall comprehensive cost ratio of 1q22 was 99.1%, with a year-on-year decrease of 0.2 percentage points, of which the comprehensive compensation ratio increased by 1.8 PCT. year-on-year; The comprehensive expense rate decreased by 2.0 PCT. year-on-year. According to the summary of solvency report, 1q21 CPIC property insurance realized a net profit of 1.59 billion yuan, a year-on-year decrease of 24.4%, the corresponding roe was 3.24%, a year-on-year decrease of 1.3 PCT., which was mainly due to the fluctuation of the equity market, and the total / comprehensive return on investment in a single quarter was only 1.3% / - 0.2% respectively, which was the main drag on the operating performance of the current period.
The net assets attributable to the parent company at the end of the period decreased slightly by 2.3% compared with the beginning of the year. 1q22 CSI 300 and gem index fell by 14.5% and 20.0%, while 1q21 fell slightly by 3.1% and 7.0% respectively in the same period, and the company realized floating profit, with a high profit base in the same period. The total investment income + profit and loss from changes in fair value of 1q22 company decreased by 34.6% year-on-year, and the net / total investment return rate was 3.7% / 3.7%, with a year-on-year decrease of 0.2 / 0.9 PCT. respectively. At the end of the period, the company's net assets attributable to the parent decreased from 226741 billion yuan at the beginning of the year to 221507 billion yuan, mainly due to the loss of 14.482 billion yuan from the change in the fair value of 1q22 available for sale financial assets. The full caliber comprehensive return on investment calculated by us is only 0.15%, which is the core drag on the current operating performance.
Profit forecast and investment rating: impacted by the continuous decline of the equity market, the company's performance is poor and strong, but the pessimistic expectation has been basically reflected in the stock price. Due to the sluggish performance of the equity market, we lowered our profit forecast and predicted that the net profit attributable to the parent company from 2022 to 2024 will be RMB 22.5 billion, 31.9 billion and 35.5 billion respectively (the original forecast was RMB 29.8 billion, 33.7 billion and 36.1 billion), with a year-on-year growth rate of - 16%, 42% and 11%. The current stock price corresponds to P / EV of 0.36/0.32/0.29 times from 2022 to 2024 respectively. Considering the valuation cost performance, we maintain the "buy" rating.
Risk warning: the equity market continues to decline, the team continues to fall off, and the underwriting loss of non vehicle business
