Key points of investment

The company announced premium income for January-April '24, life insurance of 104.524 billion yuan, -3.5% year-on-year, and industrial insurance of 77.143 billion yuan, +7.8% year-on-year.

(1) The cumulative growth rate of premium income improved month by month. The total premium for January-April was 181,667 billion yuan, a year-on-year correction of +0.99%. (2) At the same time as revenue was improving, life insurance NBV increased in the first quarter, +30.7% year-on-year, with a new business value of 5.191 billion yuan; premiums for the new insurance scale were 32.833 billion yuan, +0.4% year-on-year. (3) Remarkable results from multi-channel operation: agent channel premiums of 84.864 billion yuan in the first quarter, including new insurance of RMB 16.124 billion, of which the scale of outstanding agents was stable, with a monthly production capacity of 83,000 yuan, +33.7%; the banking insurance channel had premiums of 12.379 billion yuan, of which although the new insurance was 8.718 billion yuan, -21.8% year-on-year, mainly affected by the “integrated reporting and banking” policy, the renewal business was +220% year-on-year, driving a positive increase of 0.7% in the banking insurance channel; Among them Renewal of $697 million, +84.4% year-on-year. (4) Industrial insurance continued to maintain a high growth rate, mainly driven by the non-car insurance business. Non-car insurance revenue continued to grow rapidly to 36.014 billion yuan in the first quarter, +13.8% over the same period last year. Auto insurance grew steadily, +2.2% year over year.

Investment advice

First, at the industry level, after three or four years of deep adjustments, it is currently or about to break out of the trough. Second, at the company level, after the first phase of the company's “Changhang” transformation was completed, the second phase of the project progressed in depth from the outside and inward, and began to achieve some results. On the one hand, in terms of total volume, the company's premium income improved month by month, and was positive year over year. On the other hand, quality has also improved. The new insurance scale of life insurance agent channels, NBV, and the per capita production capacity of high-performing teams were +> 30% year-on-year. Industrial insurance also continued to grow steadily. Overall, the company's fundamentals are expected to continue to improve. The company's EPS for 24-26 is expected to be 3.18/3.76/4.00 yuan/share, maintaining an increase 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.