Financial Services Association, March 21 (Reporter Xia Shuyuan) On March 21, Ping An of China (601318.SH) announced the results for the full year of 2023.

Data show that in 2023, Ping An of China achieved operating profit of 117.989 billion yuan returned to the mother, a year-on-year decrease of 19.7%. Net profit attributable to mother was 85.665 billion yuan, a year-on-year decrease of 22.8%. Among them, the three core businesses of life insurance, health insurance, property insurance, and banking achieved a total operating profit of 140.913 billion yuan.

Industry analysts said that due to factors such as changes in new insurance contract standards and capital market fluctuations, the net profit of listed insurers in 2023 was generally under pressure, and the net profit of Ping An of China also declined. However, the value of the company's new personal insurance business increased dramatically, exceeding the assumption of long-term return on investment with included value, and cash dividends remained stable.

According to the data, in 2023, Ping An Life Insurance and Health Insurance achieved a new business value of 31.08 billion yuan, an increase of 36% over the previous year. The company plans to pay a final dividend of 1.5 yuan per share in cash for the end of 2023, and the annual dividend is 2.43 yuan per share in cash, an increase of 0.4% over the previous year.

In 2023, life insurance and health insurance achieved a new business value of $31.08 billion, an increase of 36% over the previous year

In 2023, life insurance and health insurance, as the core business of Ping An China, showed a high increase in the value of its new business.

Financial reports show that in 2023, based on the latest assumptions such as return on investment and risk discount rates, China's Ping An Life Insurance and Health Insurance business achieved a new business value of 31.08 billion yuan, an increase of 36.2% over the same period on a comparable scale.

Industry insiders analyzed that the year-on-year surge in value of Ping An's new business mainly benefited from the increase in the value of each agent's new business, as well as the momentum of banking insurance channels after the reform.

Looking at the operation of the four major channels, in 2023, the new business value of Ping An agent's channel increased by 40.3%, the value of new business per agent increased by 89.5%, and the per capita income of each agent increased by 39.2%. The share of “Excellent +” in new personnel increased 25.2 percentage points over the same period last year.

In terms of banking insurance channels, in 2023, the new business value of the Ping An Banking Insurance channel increased by 77.7%. The community grid channel has set up 65 outlets in 51 cities. The 13-month insurance policy continuation rate for surviving customers in grid promotion cities increased 5.4 percentage points year-on-year; the sinking channel continued to promote sales in 7 provinces.

In 2023, the 13-month insurance policy continuation rate of Ping An Life Insurance business increased 2.5 percentage points year on year, and the 25-month policy continuation rate increased 6.8 percentage points year on year.

In terms of the construction of a medical and pension ecosystem, in 2023, safe home care in China will cover 54 cities across the country, and high-end pension projects have already been launched in 4 cities.

The size of the insurance fund portfolio was 4.72 trillion yuan, an increase of 9% over the beginning of the year

From the investment side, in 2023, in the face of a complex and changing market environment, the return on financial investment of insurance funds declined quarter by quarter, and the overall decline occurred.

Overall, the insurance industry's return on financial investment for the first quarter, first half, first three quarters, and full year of 2023 was 3.4%, 3.22%, 2.92%, and 2.23%, respectively.

As far as Ping An China is concerned, its net return on investment is also comparable to the industry trend, showing a decline. Data show that in 2023, China's Ping An Insurance fund portfolio achieved a comprehensive return on investment of 3.6%, up 0.9 percentage points from the previous year; the return on total investment was 3%, up 0.6 percentage points from the previous year; and the return on net investment was 4.2%, down 0.5 percentage points from the previous year.

Looking at the extended cycle, in the past 10 years, Ping An of China has achieved an average net return on investment of 5.2% and an average comprehensive return on investment of 5.4%, which exceeds the assumption of long-term return on investment with included value. By the end of December 2023, China Ping An Insurance's capital portfolio was 4.72 trillion yuan, an increase of 9% over the beginning of the year.

Ge Yuxiang, a non-bank financial industry analyst at Dongwu Securities, believes that while return on investment is declining, listed insurers also simultaneously implemented the new insurance contract standard (IFRS17) and the new financial instrument standard (IFRS9) in early 2023, traced comparable data from the previous year in accordance with IFRS 17 regulations, and chose not to track comparable data from the previous year according to IFRS 9 regulations. Under IFRS 9, a large number of equity financial assets are included in FVTPL (measured at fair value and their changes included in current profit and loss), increasing the impact of stock holdings on current net profit.

Dividends per share increased 0.4% year over year in 2023, and cash dividends account for 37% of operating profit attributable to parent

As an important part of China's financial industry, insurance companies' dividends have always been “proud”. In 2023, the overall level of Ping An's cash dividend remained stable.

According to the data, Ping An of China plans to pay a dividend of RMB 1.5 per share in cash for the end of 2023. The annual dividend is 2.43 yuan per share in cash, an increase of 0.4% over the previous year. The cash dividend ratio calculated based on operating profit attributable to shareholders of the parent company is 37.3%, and the total dividends have increased for 12 consecutive years.

According to reports, in the middle of 2012-2023, Ping An China's dividend level continued to rise for 11 consecutive years. The cumulative dividend was 24 times, and the total amount of dividends exceeded 280 billion yuan.

According to industry insiders, the mechanism of normalized dividends is a reflection of the concepts of value investment, long-term investment, and rational investment. It helps to increase investors' shareholding returns and confidence, attract more long-term capital to enter the market, and form a virtuous circle.

Listed insurers share the company's development dividends with investors. On the one hand, it conveys a signal that the company's current profits are stable and cash is abundant, providing reassurance for long-term investors. On the other hand, investors are also reminded that the company is currently seriously undervalued, and that its stock price is far below the intrinsic value. Especially in a volatile market environment, the appeal of China Ping An's high cash dividends and undervaluation attributes will continue to be highlighted, which is worthy of market attention.

“The high level of dividends also shows management's confidence in the company's strategic development and long-term steady operation. Based on historical experience, in a situation where there is limited room for downward valuation, if high dividends continue for a long time, then the company's long-term stock price trend will not be too bad.” Evaluated by the person above.