\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 318 Ping An Insurance (Group) Company Of China Ltd(601318) )
Ping An Insurance (Group) Company Of China Ltd(601318) disclosed that in the first quarterly report of 2022, the operating revenue during the reporting period was 305940 billion yuan, a year-on-year decrease of 10.1%; The net profit attributable to the parent company was 20.658 billion yuan, a year-on-year decrease of 24.1%. The operating profit attributable to the parent company was 43.047 billion yuan, a year-on-year increase of 10.0%. Among them, the operating profit of life insurance and health insurance was 29.678 billion yuan, a year-on-year increase of 16.0%; The value of new business was 12.589 billion yuan, a year-on-year decrease of 33.7%.
During the reporting period, the performance of insurance investment side continued to be sluggish, but the profit of banking business increased significantly to build a safety cushion. Affected by the frequent occurrence of real estate investment risk events, the performance of the insurance investment side has remained depressed since the beginning of 2021. However, the repeated epidemic and frequent external risk events in the first quarter of 2022 deeply affected the capital markets of the mainland and Hong Kong, further suppressed the investment performance, and the return on net investment and total investment of the company decreased to 3.3% and 2.3% respectively during the reporting period, which are the lowest levels in recent years. However, the banking business continued its excellent performance, and the net profit increased by 26.8% year-on-year, building a safety cushion for the group’s profits. On the whole, the growth rate of the group’s net profit in the first quarter was still in the forefront among the peers.
Since the beginning of the year, the epidemic has been sporadic and frequent, and the agent exhibition industry has continued to be under pressure. Life insurance business, especially the sales of indemnificatory insurance, is still difficult to break away from the “face-to-face” sales model, but various restrictions accompanying the epidemic have brought many challenges to the exhibition industry. At the same time, the downward growth of residents’ disposable income has a sustained impact on the demand for insurance products. The demand for high-value guaranteed products continues to decline due to the limitation of price and cash flow structure. In addition, Huimin insurance products widely recognized by the public in recent years further squeeze the demand space of guarantee products. Superimposed on the channel reform continuously promoted by the company, the decline in the number of orders and the loss of agents formed a continuous negative feedback. At the end of the reporting period, the number of agents decreased to 538000, which has been reduced for seven consecutive quarters. In the short term, before the deterministic inflection point of the epidemic, the agent channel exhibition industry is still under great pressure.
Channel reform continues, and the dawn has emerged. In the face of changes in the industry environment, the company accelerated the reform process. In terms of agent channels, the company implements layered and refined management of the team and promotes the optimization of the team structure. While ensuring the further increase of personnel and production of high-quality and high-capacity diamond agent team, vigorously develop the potential team in Central China, and gradually increase the proportion of high-quality newcomers through the “excellent +” plan. In terms of Bancassurance channels, which have continuously increased in importance in recent years, the company continues to deepen its cooperation with Ping An Bank Co.Ltd(000001) , build an exclusive product system, share training resources, build a wealth management elite team good at insurance sales, dig deep into high-quality customer resources, and strive to maintain the premium growth rate of Bancassurance channels at a high level. In addition, relying on the country’s continuous support for the third pillar of elderly care and the health care industry, the company upgraded its medical and health strategy, gave full play to the comprehensive advantages of the medical ecosystem, focused on the development of the elderly care service modes of “insurance + home care” and “insurance + high-end elderly care”, and strive to realize the “secondary growth” of the business through the force of policies.
Investment suggestion: under the continuous influence of the epidemic, the channel reform process of Ping An Life Insurance faces many difficulties, and the implementation progress is also lower than expected. At the same time, AIA life’s accelerated layout in China has greatly weakened the company’s competitive advantage in the medium and high net worth customer base, slowed down the growth rate of high net worth customers, faced the situation of continuous sinking of channels, and the competition among domestic insurance enterprises has become more intense. However, we believe that through three years of comprehensive channel reform, the quality and production capacity of the company’s agent team have been effectively improved, and the core agent team has been growing, which is still expected to be in a more favorable position in the competition with AIA and Chinese peers. At the same time, relying on Ping An Bank Co.Ltd(000001) high-quality customer resources, the company is expected to occupy a dominant position in bancassurance, a high growth track, and build a “second engine” for debt side growth. In addition, the company’s core advantages are expected to be brought into full play in the long term with the policy support of high-efficiency empowerment of financial technology and health care industry chain. On the whole, we are still optimistic about the long-term investment value of the company, as the leader of China Insurance Group, under the Matthew effect of the industry. Among them, the scientific and technological attribute is expected to continue to raise the valuation ceiling of the company, so we maintain the “recommended” rating of the company. At present, the company’s share price is only 0.53x22evps, which is in the undervalued area and has medium and long-term investment value. It is recommended to choose the right time to configure. The target price for the year is 58.8 yuan, corresponding to 0.7x22evps.
Risk tips: macroeconomic downside risk, policy risk, market risk and liquidity risk.
