Key points of investment
The company announced its quarterly results for '24, with revenue of 245.569 billion yuan, -3.23% year on year, operating profit to mother of 38.709 billion yuan, -3.0% year on year; net profit to mother of 36.709 billion yuan, -4.3% year on year. Among them, the three core businesses of life insurance and health insurance, property insurance, and banking resumed growth. The total operating profit of the three businesses was 39.816 billion yuan, +0.3% over the same period last year.
(1) Life insurance and health insurance NBV of 12.890 billion yuan, comparable caliber +20.7% year-on-year. Mainly, production capacity continued to increase, with NBV per agent channel +56.4% year-on-year; new business value rate 22.8%, comparable caliber +6.5PCT. At the end of March, there were 333,000 personal insurance agents, 4.0% compared to the beginning of the year.
The number of agents is expected to gradually stabilize. The promotion of the community grid business model has achieved remarkable results, and the full subscription continuation rate of surviving customers was +2.5 pct compared to the same period. (2) Industrial insurance revenue of 80.627 billion yuan, +5.7% year-on-year. The comprehensive cost rate was +0.9 pct to 99.6%, mainly affected by the blizzard disaster in the early Spring Festival and travel recovery. (3) The banking business achieved net profit of 14.932 billion yuan through cost reduction and efficiency through digital transformation, +2.3% over the same period last year. However, operating income and net interest spreads have declined, mainly due to factors such as continuing to make concessions to the real economy and adjusting the asset structure. (4) In terms of investment business, at the end of March, the investment scale was >4.93 trillion yuan, +4.4% compared to the beginning of the year. (5) Comprehensive finance continued to deepen. At the end of March, the number of individual customers was nearly 234 million, +1.0% compared to the beginning of the year, with an average customer contract of 2.94.
Investment advice
Although the company's revenue and profit declined slightly year-on-year in the first quarter, the three core businesses resumed growth. In particular, the increase in life insurance per capita production capacity and new business value ratio boosted NBV growth of > 20%. We believe the company will continue to improve and get out of the trough. Overall, the company's advantages are still outstanding, and it is still one of the best insurance leaders in the industry. The company's EPS for 24-26 is estimated to be 5.53/6.21/6.80 yuan/share, maintaining an increase in holdings rating.
Risk warning:
The equity market continues to fluctuate, the transformation progress falls short of expectations, agents have declined on a large scale, and long-term interest rates have declined.