中国平安披露2024 年上半年业绩Core views
A series of regulatory policies, such as “integration of reporting and banking,” lowering scheduled interest rates, and establishing a mechanism for dynamic adjustment of scheduled interest rates, guide the personal insurance industry to achieve high-quality development, and are optimistic that the improvement in corporate value ratios will drive the continuous growth in value of new businesses. At the end of the first half of the year, the number of agents in the company changed its growth rate over the end of the first quarter, and the steady trend gradually became apparent. The subsequent decline in the size of the agent team is expected to gradually reduce the drag on the overall business scale, and the improvement in agent team production capacity is expected to continue as the results of early reforms continue to be released. In the long run, the comprehensive financial model and medical and pension strategy have built a deep moat for the company, and we are optimistic about the company's long-term value.
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Ping An of China discloses results for the first half of 2024
The company's operating profit for the first half of the year was -0.6% to 78.48 billion yuan, of which the NBV for life insurance and health insurance business was +11.0% to 22.32 billion yuan; revenue from financial insurance services was +3.9% year-on-year, and the comprehensive cost ratio was -0.2 pct to 97.8% year over year; total and net return on investment were +0.1 pct, -0.2 pct to 3.5% and 3.3%, respectively.
Brief review
1. Overall performance: Operating profit performance was steady, and the cash dividend level remained stable. Operating profit for the first half of the year was -0.6% to 78.48 billion yuan. Among them, life insurance and health insurance/financial insurance/bank/asset management/technology business were +0.7%/+7.2%/-8.2%/-8.2%/-83.2% to 54.66 billion yuan/9.91 billion yuan/15 billion yuan/1.3 billion/2 0.9 billion yuan. billion yuan. Operating profit attributable to parent for the second quarter was +1.9% to 39.77 billion yuan, of which life insurance and health insurance/ financial insurance/ banking/asset management/ technology business were -0.8%/+27.9%/+1.5%/+260.7%/-52.7% to 27.37 billion yuan/6.04 billion/ 6.35 billion/ 0.39 billion/ 0.49 billion yuan, respectively. Net profit attributable to mother in the first half of the year was +6.8% YoY to 746.0.2 billion yuan, and +20.4% YoY to 37.91 billion yuan in the second quarter. In terms of dividends, the company distributed an interim dividend of RMB 0.93 per share in cash to shareholders.
2. Life insurance and health insurance business: NBVM improvements led to NBV growth. CSM balance increased month-on-month, NBV +11.0% to 22.32 billion yuan in the first half of the year, which was used to calculate NBV's first-year premium of -19.0% to 92.22 billion yuan, and NBVM was +6.5pct to 24.2% year over year. The main reasons for NBVM's year-on-year improvement forecast are: 1) reduction in scheduled interest rates; 2) improvement in banking insurance channel rates in the context of the “integrated reporting and banking” policy; 3) optimization of the business structure. In the second quarter of a single quarter, NBV was 9.43 billion yuan, the same as the previous year. Among them, the first-year premium used to calculate NBV was -26.4% to 35.59 billion yuan compared to the same period last year. In the first half of the year, Ping An Life Insurance's 13-month and 25-month policy continuation rates were +2.8pct and +3.3pct, respectively, to 96.6% and 90.9%, respectively.
In the first half of the year, CSM for the new business was -12.6% to 23.74 billion yuan, mainly due to the current value of premiums for the new business -10.7% year-on-year to 229.53 billion yuan, and the profit margin of the new business -0.2pct to 10.3% year-on-year.
Insurance service performance and others in the first half of the year were -2.2% to 47.05 billion yuan, mainly due to CSM amortization -5.5% YoY to 36.53 billion yuan. Operating deviation and others were +10.2% YoY to 7.08 billion yuan. As of the end of the first half of the year, the CSM balance was 774.4 billion yuan, +0.8% compared to the end of the previous year.
3. Agent channel: Production capacity per capita still increased under a high base. The increase in team size compared to the end of the first quarter led to an increase in per capita production capacity, which led to NBV growth. NBV was +10.8% YoY to 18.11 billion yuan in the first half of the year, mainly due to NBV per capita +36.0% YoY to 0.0587 million yuan/person per half year. The average number of agents per month was -18.7% year-on-year to 0.308 million. The increase in production capacity per capita is mainly due to a series of measures taken by Ping An Life Insurance, such as practical training, scenario empowerment, equity support, and high-end customer service.
In terms of manpower scale, as of the end of the first half of the year, the number of agents was 0.34 million, -2.0% compared to the end of the previous year and +2.1% compared to the end of the first quarter. The company focused on increasing “excellent” with “excellent”, and the proportion of “excellent +” in the new manpower was +10.2 pct year-on-year.
In the first half of the year, the agent channel was used to calculate NBV's first-year premium of -24.5% to 54.82 billion yuan, and NBVM was +10.5pct to 33.0% year-on-year.
4. Banking insurance channel: The value transformation strategy continues to advance, and the value contribution continued to increase in the first half of the year NBV by +17.3% to 2.64 billion yuan, accounting for +0.6 pct to 11.8% year on year. In the first half of the year, the banking insurance channel was used to calculate NBV's first-year premium of -18.1% to 11.75 billion yuan, and NBVM was +6.8pct to 22.5% year-on-year. The year-on-year improvement in NBVM is expected to be mainly due to an improvement in banking insurance channel rates after the implementation of the “integrated reporting and banking” policy. In terms of the premium payment structure, the banking insurance channel accounted for 11.1pct to 52.1% year-on-year premium payments in the first half of the year.
5. Financial insurance business: Revenue grew steadily, business quality remained good, underwritten profit improved year-on-year, and comprehensive cost ratio optimization led to an increase in underwriting profit. Underwriting profit for the first half of the year was +15.7% to 3.53 billion yuan, of which insurance service revenue was +3.9% year over year to 161.91 billion yuan, and the comprehensive cost ratio was -0.2 pct to 97.8% year over year, mainly affected by the decline in underwriting losses in the guaranteed insurance business.
On the revenue side, auto insurance/non-car insurance/eHealth Insurance service revenue in the first half of the year was +6.0%/-3.1%/+11.2% to 108.39 billion yuan/414.0 billion yuan/12.12 billion yuan, respectively, and the original premium income of car insurance/liability insurance/health insurance/agricultural insurance/ enterprise financial insurance/ guarantee insurance was +3.4%/-0.3%/+43.5%/+32.9%/-182.9%/-182.82 billion yuan to 104.82 billion yuan/ 14.18 billion yuan/10.09 billion yuan/7.35 billion yuan/6.2 billion yuan/-1.81 billion yuan
On the cost side, Ping An Insurance strengthened business management and risk screening. The overall cost rate was -0.2 pct to 27.2% year on year, and the payout rate remained the same year over year. Looking at insurance types, the comprehensive cost rates for car insurance/liability insurance/health insurance/agricultural insurance/enterprise financial insurance/guarantee insurance were +1.0pct/-1.5pct/+2.5pct/+5.7pct/-4.9pct to 98.1%/98.0%/95.9%/95.9%/94.7%/106.8%, respectively. Among them, the year-on-year increase in the comprehensive cost rate of car insurance was mainly affected by frequent natural disasters such as torrential rain. In recent years, the company has continued to reduce the scope of guarantee insurance coverage and suspended additional financial guarantee insurance services in the fourth quarter of 2023. In the first half of 2024, the outstanding liability balance of Ping An Insurance Guarantee Insurance continued to decline, and risk exposure quickly settled. Due to the gradual recovery of existing business claims, underwriting losses fell sharply year-on-year, and the impact on the company's overall business quality was greatly reduced.
6. Asset side: Balanced asset allocation strategy+year-on-year improvement in equity asset performance led to a year-on-year increase in comprehensive investment returns in the first half of the year. The company's insurance fund portfolios achieved net, total, and return on investment -0.2 pct, +0.1 pct to 3. 3%, 3.5%, and 4.2% year over year, respectively. Among them, the year-on-year improvement in comprehensive investment return was mainly due to balanced asset allocation strategies, and equity asset performance improved compared to the same period last year. Moreover, the company excluded fair value measurement and changes in supporting life insurance and health insurance businesses The amount of change in fair value of debt investments included in other comprehensive income. The year-on-year decline in net return on investment in the first half of the year was mainly affected by the decline in maturing returns on existing assets and new fixed income assets.
7. Banking business: Operations remained steady, and capital and risk offsetting capacity remained good in the first half of the year. In the first half of the year, the operating profit from banking business to parent was +1.9% to 15 billion yuan. In the second quarter, operating profit to parent was +1.5% to 6.35 billion yuan.
In the first half of the year, net interest spread was -0.59pct YoY to 1.96%. In terms of retail business, by the end of the first half of the year, retail customer assets (AUM) were 41206.0.3 billion yuan, +2.2% compared to the beginning of the year; the number of retail customers was 126.191 million, including 1.424 million wealth customers, +3.4% compared to the beginning of the year; and personal deposit balance was 12903.0.5 billion yuan, +6.9% from the beginning of the year.
The overall quality of assets is stable. By the end of the first half of the year, Ping An Bank's non-performing loan ratio was 1.07%, +0.01pct compared to the beginning of the year; the provision coverage rate was 264.26%, and the risk compensation capacity remained good.
8. Asset management business: the scale of asset management is steadily increasing
In the first half of the year, the asset management business's operating profit to parent was -8.2% to 1.3 billion yuan. In the second quarter, operating profit attributable to parent was +260.7% to 0.39 billion yuan.
By the end of the first half of the year, the company's asset management scale exceeded 7.6 trillion yuan.
9. Technology business: Providing diverse products and services to users in the ecosystem. The synergy benefits were remarkable. In the first half of the year, the operating profit of the technology business was -83.2% to 0.29 billion yuan. In the second quarter, operating profit to the mother was -52.7% to 0.49 billion yuan.
Specifically, look at the performance of each member company: 1) Lujin Holdings: Continuing to promote a prudent management strategy that puts quality first. The scale of the loan business contracted, compounded by rising taxes and fees due to special dividends, resulting in a net loss of 1.663 billion yuan in the first half of the year. 2) Financial One Account: Net loss in the first half of the year narrowed year-on-year to 0.7 billion yuan. 3) Ping An Health: The first half of the year achieved operating income of 2.093 billion yuan and net profit of 0.057 billion yuan (-0.245 billion yuan in the same period last year). 4) Auto Home: In the first half of the year, it achieved operating income of 3.482 billion yuan and net profit of 1.066 billion yuan, +1.3% year-on-year.
Investment suggestions: The policy will drive the improvement of the competitive environment in the personal insurance industry. I am optimistic that the improvement of the company's value ratio will drive the continuous growth of new business value, “integration of reporting and banking”, the reduction of scheduled interest rates, and the establishment of a mechanism for dynamic adjustment of the scheduled interest rate to guide the personal insurance industry to achieve high-quality development. I am optimistic that the improvement of the company's value ratio will drive the continuous growth of new business value. At the end of the first half of the year, the number of agents in the company changed its growth rate over the end of the first quarter, and the steady trend gradually became apparent. The subsequent decline in the size of the agent team is expected to gradually reduce the drag on the overall business scale, and the improvement in agent team production capacity is expected to continue as the results of early reforms continue to be released. In the long run, the comprehensive financial model and medical and pension strategy have built a deep moat for the company, and we are optimistic about the company's long-term value. The company's NBV growth rate for 2024/2025/2026 is expected to be 11.7%/11.3%/11.6%, respectively, giving the company a target price of 53.8 yuan for the next 6 months, corresponding to a PEV of 0.65 times in 2024, maintaining a “buy” rating.
Risk warning:
Debt-side reforms fall short of expectations: Currently, the company's life insurance business continues to deepen its transformation. If the quality of the company's agent team falls short of expectations, it may affect the company's new business value.
Long-term interest rates fall beyond expectations: If long-term interest rates decline more than expected, it will adversely affect the company's investment income.
A sharp decline in the equity market: If there is a sharp decline in the equity market, it will adversely affect the company's return on investment.
The recovery in residents' demand for insured products continues to fall far short of expectations: the new business value rate for insured products is generally high. If residents' demand for such products continues to be sluggish, it may have a negative impact on the company's new business value growth.
