[Event] China Taibao announced 2024Q1 results: 1) Operating revenue of 95.4 billion yuan, +1.1% year over year; insurance service revenue of 67 billion yuan, +2.4% year over year. 2) Net profit attributable to mother was 11.8 billion yuan, +1.1% year-on-year. 3) NBV of 5.19 billion yuan, +30.7% YoY under uncomparable caliber. 4) Net assets returned to mother of 257.9 billion yuan, +3.3% compared to the beginning of the year. 5) Weighted ROE was 4.6%, -0.3 pct year over year.
Life insurance: The premiums of new individual insurance policies have increased dramatically, and the production capacity and income of high-performing teams have continued to rise. 1) Premium: Premium for new individual insurance policies was RMB 161 billion, +31.3% year on year; mid-term payment was RMB 10.6 billion, +25.4% year over year. The premium for the new bank insurance channel was 8.72 billion yuan, -21.8% compared with the same period last year. We believe that the negative increase in premiums for new orders through banking insurance channels is mainly affected by the “integration of reporting and banking” policy. 2) Revenue from insurance services was 20.9 billion yuan, -5.1% year-on-year. 3) Manpower:
U Manpower's monthly first-year premium per person was 83,000 yuan, +33.7% over the same period last year. U Manpower's monthly commission income per capita in the first year was 9,313 yuan, an increase of 14.1% over the previous year. Excellent growth and nurturing results have been shown. The proportion of manpower recruitment, newcomer production capacity, and newcomer contributions all increased year-on-year. 4) We believe that during the period when the banking insurance channel was affected by the “integrated reporting and banking” policy for a short period of time, the agent channel effectively took over the baton of growth, fully reflecting the advantages of diversified management of the company's channels. It is expected that premiums for new individual insurance channels will continue to grow at a high rate in the first half of the year, and banking insurance channels are also expected to resume positive growth.
Industrial insurance: The comprehensive cost ratio bucked the trend, and non-car premiums achieved double-digit growth. 1) Comprehensive cost rate 98.0%, -0.4pct year on year. 2) Premium: Industrial insurance achieved original premium income of 62.5 billion yuan, +8.6% over the same period last year. Among them, car insurance premiums were 26.5 billion yuan, +2.2% year on year; non-car premiums were 36 billion yuan, +13.8% year over year. 3) Revenue from insurance services was 45.6 billion yuan, +5.9% year-on-year. 4) We believe that the improvement of COR is mainly due to the dual optimization of vehicle insurance costs and structures and the ability of non-car insurance optimization to identify and manage risks in key areas.
Investment: In an environment where market interest rates continue to fall, the net return on investment remains stable. 1) The Group's investment assets reached 2344.8 billion yuan, +4.2% compared to the beginning of the year. 2) Unannualized net return on investment was 0.8%, the same as year on year; return on total unannualized investment was 1.3%, -0.1 pct year on year.
The valuation is still low, and the rating is “superior to the market”. We are optimistic that the company's life insurance sector will focus on building a closed loop of customer-centered and value-oriented management from the three aspects of multi-channel management, comprehensive operation support, and value creation management, and will advance the “Changhang Operation” in depth from the outside. The company's financial insurance sector comprehensively strengthens systematic capacity building, promotes customer management, and deepens quality control. As of April 26, 2024, the company's stock price corresponds to 2024EPEV 0.42x. We gave the company a rating of 0.55-0.6 times the 2024 PEV, a reasonable value range of 33.37-36.41 yuan, and a “superior to the market” rating.
Risk warning: 1) Long-term interest rates are trending downward, 2) the stock market fluctuates greatly, and 3) New premium growth falls short of expectations.