The fundamentals continue the trend in the first half of the year and are in line with expectations
In the third quarter of 2021, the first-year premium of life insurance business was about 27.1 billion yuan (- 24% compared with the same period last year), and the value of new business was about 7.9 billion yuan (- 33% compared with the same period last year). As of the end of September, the number of life insurance agents was about 710000 (month-on-month-20%), in line with expectations. Against the background of a sharp decline in the number of agents in the life insurance industry, the group's diamond team remained stable compared with the previous quarter, proving that the group's agent structure is being optimized and that high-quality manpower has not been substantially lost. High-quality manpower is the basis of the inflection point of the group's life insurance business. As long as the high-quality manpower is stable, the inflection point of the life insurance business will appear sooner or later, which is only a matter of time.
In the third quarter alone, the group realized a homing operating profit of 36.9 billion yuan (+ 7% compared with the same period last year), of which the operating profits of life insurance and property insurance were 23.2 billion yuan (- 1.8%) and 2.5 billion yuan (- 10%) respectively. In the first three quarters, the group achieved a parent operating profit of 118.7 billion yuan (+ 9.2%), of which the operating profits of life insurance and property insurance were 72.7 billion yuan (- 2.8%) and 13.2 billion yuan (+ 20.2%) respectively, accounting for 72.4%. The corresponding operating ROE decreased by 0.6 percentage points to 20%. The performance is in line with expectations.
Life insurance: the number of agents has declined, and the proportion of premiums for savings products has increased in the first three quarters. The premium for the first year of life insurance is about 114.7 billion yuan (- 4.5%), and the value of new business is about 35.2 billion yuan (- 17.8%). The corresponding new business value rate has dropped to 30.7% compared with the same period last year, and the proportion of sales of savings insurance has further increased. At the same time, the net investment rate of return is 4.2% (- 0.3pcs), the total investment rate of return is 3.7% (- 1.5pcs), the net investment rate of return in the third quarter is 52.4 billion yuan (+ 10.8%), and the total investment income is 44.7 billion yuan (- 22.5%).
Car insurance: the premium is under pressure, and the comprehensive cost rate is reduced.
In the third quarter, the original insurance premium income was 66 billion yuan (- 12.4%), including car insurance 46.4 billion yuan (- 9.7%), non-motor vehicle insurance 13.4 billion yuan (- 30.6%), accident and health insurance 6.1 billion yuan (+ 34.2%), and the comprehensive cost rate in the first three quarters was 97.3% (- 1.8pcs).
Investment advice: maintain the profit forecast, maintain the "buy" rating and maintain the profit forecast. In 2021-2023, the net profit of homing in 2021-2023 is 1,687,94.2 billion yuan, and the diluted PE is 10.62 yuan. The current stock price corresponds to 6max, 5max, 5x. Maintain the "buy" rating with a short-term target price of 66 yuan. At present, the key to the group is the agent reform, if the high-end manpower continues to be stable, then the inflection point of the group channel is bound to appear, it is only a matter of time.
Risk tips: liquidity tightening expectations ahead of time, affecting GDP growth expectations.