Sunshine Insurance is a private insurance service group established and developed in accordance with the market-oriented mechanism, and it is also a scarce listed private insurance company. Its major shareholders are both private enterprises and state-owned enterprises, with diversified equity background, high degree of equity dispersion and high degree of marketization. The company's profitability is robust. Under the old criteria, Sunshine Insurance's total premium income growth rate was more than 5% from 2020 to 2022, with a three-year CAGR of 7.3%. As of 1H23, the company's insurance service income was 30.2 billion yuan, an increase of 7.3% over the same period last year; the company realized a net profit of 2.9 billion yuan, an increase of 9.0% over the same period last year, mainly due to the improvement of expense management in the course of operation, and the net profit growth rate was higher than the premium growth rate.
Life insurance business: the channel value transformation has achieved remarkable results, the profitability has been enhanced, and the business quality is expected to continue to improve. The strategy of the "vertical and horizontal plan" has deepened its landing and yielded fruitful results. The life cycle security allocation scheme continues to meet the full range of insurance needs of residents, and the growth trend of life insurance is expected to continue. The total premium income of 1H23 Sunshine Insurance life insurance business was 45.8 billion yuan, an increase of 9.0% over the same period last year. The new business value of the company was 2.68 billion yuan, an increase of 37% over the same period last year. The internal value of the company was 104.98 billion yuan, an increase of 3.7% over the same period last year, and the growth rate of new business value increased significantly. The premium continuation rate continues to rise, the business quality is improved, and the profitability is further enhanced.
Bancassurance channel: new order and NBV contribute the main force, the value rate is higher than that of the same industry. As of 1H23, the new order of the bancassurance channel accounts for 76%; the new business value of the bancassurance channel accounts for 63%. The contribution of the new order to the new business value is higher than that of other listed insurance companies, and the value transformation has achieved remarkable results. Under the background of "integration of newspaper and bank", Sunshine Insurance will continue to benefit from the optimization of cost management of bancassurance channels, and the value transformation of bancassurance channels is expected to be further deepened. Compared with overseas, European bancassurance channels account for more than 60% of premiums, while bancassurance channels in Southeast Asia and other regions account for an average of more than 30%. It is expected that the proportion of China's bancassurance channel (33.5% in 2021) will continue to increase in the future, and the company is expected to continue to benefit from the expansion of bancassurance channel.
An insurance channel: the premium growth rate of the agent channel has warmed up, and the production capacity is substantially ahead of the industry. As of 1H23, the agent channel premium was 10.9 billion yuan, an increase of 28.8% over the same period last year, with a significantly higher growth rate; the value of new business was 908 million yuan, an increase of 17% over the same period last year. In terms of manpower and capacity:
The average monthly manpower of the agent channel was 55000, a decrease of 15.8% over the same period last year, and the per capita production capacity reached 26000 yuan (about 2-3 times the level of some peers), an increase of 63% over the same period last year.
Property insurance business: car insurance market share ranks high, non-vehicle comprehensive cost rate improved. 1H23 property insurance premium income accounted for 32% of the total premium income, car insurance premium 12.9 billion yuan accounted for nearly 60%, property insurance COR98.5%.
Car insurance business: as of 1H23, Sunshine property Insurance realized premium income of 21.9 billion yuan, an increase of 5.1% over the same period last year, and the net profit of property insurance was 1.6 billion yuan, ranking fourth in the industry. By 2022, the premium scale of Sunshine property Insurance was 24.6 billion yuan, an increase of 6.27% over the same period last year, a market share of 3.0%, an increase of 0.02% over the same period last year, ranking sixth in the industry in terms of market share; realized underwriting profit of 640 million yuan, accounting for 2.9% of the total profit of the industry, ranking fifth in the industry and optimizing cost control ability. In the first half of the year, Sunshine property Insurance COR is 98.3%, the underwriting profit trend is expected to further continue with the auto insurance "newspaper-in-one" cost management optimization, and gradually keep pace with the head listed insurance companies.
Non-car insurance business: the comprehensive cost rate has been comprehensively optimized, and most of them have dropped significantly compared with the same period last year. As of 1H23, the comprehensive cost rate of sunshine insurance is 98.7%, of which the comprehensive cost rates of Italian health insurance, warranty insurance and liability insurance are 94.8%, 99.5% and 98.3%, respectively, compared with the same period last year. + 0.1pct,-2.5pct,-4.7pct, the overall comprehensive cost rate is expected to continue to improve.
Asset side: the rate of return is better than that of the same industry, and the three-party business is growing rapidly. As of 1H23, the total investment assets of Sunshine Insurance reached 466.6 billion yuan, an increase of 9 per cent over the end of last year. The size of fixed income assets was 326.9 billion yuan, an increase of 13% over the end of last year; the size of equity assets reached 97.9 billion yuan, an increase of 9% over the end of last year, of which the size of stocks was 56.2 billion yuan, up 6% from the end of last year. Under the new criteria, the total investment rate of return is 3.5%, the net investment rate of return is 3.4%, the comprehensive income is 13.5 billion yuan, and the comprehensive investment rate of return is 4.9%, an increase of 2.2 percentage points over the same period last year. As of 1H23, the proportion of entrusted management of third-party assets is 48.9%, mainly due to the active optimization and adjustment of product structure. In the context of large asset management, the company's asset management scale is expected to continue to improve in the future.
Cover for the first time, giving a "highly recommended" rating. We forecast that the total premium income of 2023Universe 2024Company2025 will be 120318,000,000,000 yuan respectively, the net profit of homing mother will be 100million yuan in 56-66-74, and the PEV will be 0.41 pound 0.39max 0.36x. In view of the high proportion of the company's banking and insurance channels, it will continue to benefit from the value growth brought about by the "integration of newspaper and bank", giving the company a monthly target price of HK $5.63 for 0.44x PEV,6 in 2023, with room for an increase of about 34.6%.
Risk tips: equity market fluctuations; long-end interest rates downward; sales of new predetermined interest rate products are not as expected.