Key points of investment

The total amount of original insurance premium income for the six months prior to the company's announcement was 427.283 billion yuan, including 79.056 billion yuan for life insurance, 311.996 billion yuan for financial insurance, and 36.231 billion yuan for health insurance.

(1) The cumulative year-on-year growth rate of the original premium income in the first half of the year was +3.34%, lower than the 9.07% year-on-year growth rate in the first half of '23, but it was 2.02 PCT higher than the first quarter of '24. (2) The cumulative year-on-year increase in financial insurance revenue in the first half of the year was 11.066 billion yuan, +3.7%. Mainly: motor vehicle insurance remained stable, increasing by 3.465 billion yuan, +2.5% year over year. The reason may be that passenger car sales improved month-on-month and the average vehicle premium decline narrowed; eHealth Insurance increased 4.138 billion yuan, +5.7% year-on-year, which may be related to steady growth in the major illness business; and agricultural insurance increased by 1.499 billion yuan, +3.4% year over year, which may be affected by some policy businesses. (3) The cumulative year on year of life insurance changed from -8.2% in the first quarter to +0.3% in June, with obvious signs of recovery. Mainly, the term renewal period increased by 8.682 billion yuan, +24.5% year over year, while long-term insurance was -20.4% year over year, which may be related to the “integration of reporting and banking” of banking insurance channels and the company's active optimization of the contract business structure. (4) Health insurance continued to maintain a high growth rate of +7.4% compared to the same period last year. Mainly, short-term insurance increased by 1.31 billion yuan, +8.7% year over year, and 0.798 billion yuan over term period, +10.4% year over year.

Investment advice

Currently, in terms of revenue, the insurance industry was under some pressure in the first half of the year due to stricter regulatory policies such as the “integration of reporting and banking” of the current banking insurance channel and last year's high base. In terms of compensation, the growth rate remains high. First, life insurance policies, which had grown rapidly before, will be concentrated on expiring in recent years. Second, there have been many economic losses from natural disasters this year, and third, car insurance coverage has increased.

In terms of investment income, it is affected by fluctuations in the capital market. In this environment, the company is growing steadily and has an excellent structure. Industrial insurance revenue has maintained steady growth, and there are obvious signs of recovery in life insurance revenue. We continue to be optimistic about the company's development. We believe that the company's net profit growth rate in '24 is expected to return to normal levels. EPS is expected to be 0.60/0.69/0.75 yuan/share in 24-26, maintaining an increase rating.

Risk warning:

Product sales fell short of expectations, equity markets continued to fluctuate, large-scale natural disasters broke out again, and long-term interest rates declined.