The company's profit performance is steady, the growth rate is better than that of peers, and exceeds market expectations. In the first quarter of 2024, Taibao's net profit increased 1.1% year on year, and maintained steady growth on a high basis, while interbank profits generally declined year on year, mainly due to the company's stable investment income performance, year-on-year improvement in the comprehensive financial insurance cost ratio, and income tax contributions.
The results of the Changhang operation continued to be reflected. New single-instalment premiums paid through agent channels increased dramatically over the same period last year, and business quality improved. Life insurance premiums fell 2.3% year on year. The decline was mainly due to renewal premiums through agent channels. New policy premiums remained flat year on year. Among them, new single instalment payments increased 25% year over year. Affected by the integration of reporting banks, premiums for new bank insurance channels fell 21% year on year. The agent channel has a stable team size with excellent performance, and production capacity and revenue continue to rise. The 14/25-month insurance policy continuation rate was 96.9%/92.9%, and the quality of business continued to improve compared to 2023.
The value growth rate of the new business is ahead of its peers. The value of the new business increased by 30.7% year on year, and the growth rate was higher than that of China Life Insurance and Ping An; we calculate that the value rate of the new business increased by nearly 4 percentage points year over year, which is mainly due to lower scheduled interest rates, product structure optimization, and lower banking insurance channel handling rates. We expect the value of the company's new business to increase by approximately 17% year over year in 2024.
The comprehensive cost ratio of financial insurance improved year-on-year, which is better than that of peers. Revenue from financial insurance premium services increased 5.9% year on year in the first quarter; the comprehensive underwriting cost ratio was 98.0%, down 0.4 percentage points year on year, and the performance was better than that of peers.
The return on investment is steady, and the performance is better than that of peers. Investment assets increased 4.2% from the beginning of the year, and the allocation of major asset classes was stable. The net return on investment in the first quarter was 0.8%, the same as the previous year, while the industry generally declined; the total return on investment was 1.3%, down 0.1 percentage points from the previous year, and the annualized level was higher than that of peers.
Maintain a buy rating. The results of the company's life insurance reform continue to be reflected. The value growth rate of the new business is leading the industry, and the investment income and profit performance are steady. We have updated our profit forecast based on the new accounting standards. We expect the improvement trend on both sides of the company's assets and liabilities to continue, and ROE is expected to remain around 12%. Based on a net market ratio of 0.8 times in 2024, we lowered our target price from HK$30 to HK$25. The company currently has a net market ratio of 0.6 times and a dividend ratio of more than 6%. The valuation is attractive and maintains a buying rating.