Matters:
The company announced its 2024 quarterly report. 2024Q1 achieved insurance service revenue of 126.2 billion yuan, +7.7% year on year; net profit to mother of 9 billion yuan, -23.5% year on year; weighted average ROE of 3.7%, -1.3 pct year on year.
The COR of Human Insurance reached 97.9%, +2.2pct year on year; the comparable value of the new Human Insurance business was +81.6% compared to the same period last year.
Commentary:
Financial insurance is growing steadily, and COR is rising but is still superior to its peers. 2024Q1, Human Insurance achieved insurance service revenue of 113.8 billion yuan, +5.9% over the same period last year. According to the original premium scale, the growth rate of People's Insurance is in the middle of the ranking of major listed insurers: Taibao +8.6% > Human Insurance +3.8% > Ping An +2.8%, and the market share reached 35.5%. In terms of car insurance, human insurance is lower than that of major listed insurers: Ping An +3.5% > Taibao +2.2% > Human Insurance +1.9%. The overall boom in non-auto insurance was good, with the exception of credit guarantee insurance of -7.6%, with the exception of iHealth Insurance, Agricultural Insurance, and Liability Insurance +6.2%/+1.3% YoY respectively. The comprehensive cost rate of 2024Q1 is +2.2pct to 97.9% year over year. It is expected to be mainly affected by increased year-on-year recovery in January travel, blizzard weather, and freezing rain, but it is still superior to major listed insurers (Taibao 98.0%, Ping An 99.6%).
Life insurance NBV has soared, and the value ratio of new businesses is expected to increase markedly. The value of the new business of People's Insurance Life Insurance 2024Q1 was +81.6% year over year; original premiums were -8.2% year over year to $54.5 billion. Among them, long-term insurance was -21.4% year-on-year to 24.3 billion yuan. Under pressure from new order growth, the value of the new business increased sharply year-on-year. It is expected that the value ratio of the new business will increase markedly, driven by lower product pricing interest rates, lower channel costs, and product structure optimization. The year-on-year ratio for new orders was -33.4%, and the year-on-year ratio for futures contracts was -4.9%, and the barge ratio was clearly optimized.
Human Insurance Health achieved insurance service revenue of 6.8 billion yuan, +40.6% year over year; original premiums were +8.2% year over year to 24.5 billion yuan. Among them, long-term insurance had a year-on-year ratio of +2.4%, and a year-on-year ratio of -6.5% for long-term insurance.
The impact on the investment side puts pressure on net profit. 20241Q1 achieved overall insurance service revenue of 126.2 billion yuan, +7.7% year-on-year, and overall performance on the debt side was good. However, due to fluctuations in the equity market, investment income decreased by 5.6 billion yuan (-69.1%) year on year, and income from fair value change decreased by 2.3 billion yuan year on year (-52.8% year over year).
Driven by the investment side, 2024Q1's net profit to mother was -23.5% year-on-year to 9 billion yuan.
Investment advice: 2024Q1, the company's financial insurance maintained a steady development trend, life insurance NBV achieved a high increase, and overall debt side performance was good. Affected by the investment side, the net profit growth rate is under pressure. Looking ahead to 2024, we are still optimistic about the company's advantage as a financial insurance leader. 1/3 market share plus continuous improvement in risk management level will drive underwriting profits to continue to rise. The current tightening of regulations and last year's high base may put some pressure on the growth of life insurance volumes, but the new business value rate is expected to continue to make up for the growth rate of new orders. At the same time, as demand for medical care and old-age care continues to be released and the company is deeply involved in the field of health management, People's Health Insurance may continue to show impressive results. We maintain the 2024-2026 EPS forecast value of 0.59/0.66/0.73 yuan, maintain the 2024 PB target value of 1.1 x for the property insurance business, 1x for other business, and 0.5x for the personal insurance business, and 7.1 yuan for the corresponding 2024 target price. Maintain the company's “Recommended” rating.
Risk warning: regulatory changes, reforms falling short of expectations, long-term interest rates continue to decline