\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) China Pacific Insurance (Group) Co.Ltd(601601) 601)
Event: the company disclosed that in the first quarterly report of 2022, the group achieved operating revenue of 146.6 billion yuan (yoy-3%), net profit attributable to parent company of 5.4 billion yuan (yoy-36%) and earnings per share of 0.57 yuan (yoy-36%).
We believe that the company’s focus in 2022q1 includes: 1) the decline of new individual insurance policies is obvious, and bancassurance drives the premium. The premium of new individual insurance policies was 9.2 billion yuan (yoy-44%), and the new bancassurance policies increased by 1108% year-on-year; 2) Property insurance premiums achieved double-digit growth, and the comprehensive cost rate reached 99.1%, a slight decrease of 0.2pct compared with the same period last year; 3) Investment income dragged down the growth of net profit. The company’s Q1 annualized total investment income is 3.7% (yoy-0.9pct.).
Bancassurance channels achieved high growth, and the decline of new individual insurance orders expanded. CPIC life insurance realized a premium income of 99.5 billion yuan (YoY + 4.2%) in 2022q1, of which the premium of new orders was 28.4 billion yuan (YoY + 22.1%), which was mainly driven by new orders from bancassurance channels. 1) New individual insurance policies fell sharply. CPIC’s 2022q1 individual insurance channel achieved a premium income of 79.3 billion yuan (yoy-10.0%), of which the new single premium of individual insurance was 9.2 billion yuan (yoy-44.1%), which was mainly affected by the high base in the same period and the late start of 2022. 2) Bancassurance drove premium growth. Affected by the company’s focus on strategic channels of bancassurance business and the low base in the same period last year, bancassurance channels achieved high growth in 2022q1, with a premium income of 11.7 billion yuan (YoY + 892.9%) in Q1, including 11 billion yuan (YoY + 1108.1%) of Bancassurance new policy premium. Considering the high base of factors such as the switching between new and old serious illness insurance in the same period last year, although the increment of Q1 bancassurance channel is obvious, the pressure on NBV of the company in the first quarter is still very obvious.
The “long voyage plan” has achieved initial results, and the core manpower has stabilized and rebounded. In 2022, the company fully launched the first phase of the “long voyage plan” and launched the “core” basic law, with initial results. In 2022q1, the core manpower increased month on month, and the monthly per capita insurance business income of agents in the first year increased by 19.9% year-on-year. In addition, the retention rate of agents continued to be optimized, and the business quality was significantly improved. The 13-month policy continuation rate was 89.0%, an increase of 5.3pct.
Property insurance premiums achieved double-digit growth, and the comprehensive cost rate improved slightly. CPIC property insurance Q1 achieved a premium income of 49.9 billion yuan (YoY + 14.0%), including 24.4 billion yuan (YoY + 11.8%) for auto insurance and 25.4 billion yuan (YoY + 16.2%) for non auto insurance, both of which achieved double-digit growth. In addition, the comprehensive cost rate of CPIC property insurance also shows a marginal improvement trend. In 2022q1, the comprehensive cost rate is 99.1% (yoy-0.2pct.), The comprehensive loss ratio is 70.4% (YoY + 1.8pct.), The comprehensive cost rate is 28.7% (yoy-2.0pct.), The comprehensive cost rate decreased slightly.
The investment income decreased significantly, dragging down the net profit. By the end of the first quarter of 2022, the company’s investment assets were 1867.3 billion yuan, an increase of 3.0% over the beginning of the year; In 2022q1, the return on investment is 18.3 billion yuan (yoy-33%), and the annualized total return on investment is 3.7% (yoy-0.9pct.), The net return on investment is 3.7% (yoy-0.2pct.), Mainly affected by the large pullback of the equity market in the first quarter, the investment side of the company was under pressure, dragging down the net profit by 36% year-on-year.
Investment suggestion: maintain the Buy-A investment rating. It is estimated that the EPS of China Pacific Insurance (Group) Co.Ltd(601601) 20222024 will be 2.97 yuan, 3.77 yuan and 4.37 yuan respectively, corresponding to 0.4 times of 2022pev, maintaining the Buy-A rating, and the six-month target price is 32 yuan.
Risk tip: the risk of sharp fluctuations in the equity market / the risk of a large number of marketers falling off / the risk of a sharp decline in the capacity of marketers.
