Ping An Insurance recently announced its performance for the first half of 2024. The company achieved operating profit attributable to shareholders of the parent company of 78.482 billion yuan; annualized operating ROE of 16.4%; and net profit attributable to shareholders of the parent company of 74.619 billion yuan, a year-on-year increase of 6.8%. During the period, Ping An achieved new business value of life insurance and health insurance businesses of 22.32 billion yuan, a year-on-year increase of 11.0%. At the same time, Ping An will distribute a midterm dividend of RMB 0.93 per share in cash to shareholders, maintaining a stable level of cash dividend.
After the performance announcement, China Merchants Securities, Guotai Junan, Haitong Securities, Founder Securities, Huatai Securities, CICC, China Securities Co., Ltd., Everbright Securities, and Northeast Securities have given the latest ratings for Ping An Insurance. Among them:
China Merchants Securities: Maintaining a 'strongly recommended' rating for Ping An Insurance.
Guotai Junan: Maintaining a 'buy' rating for Ping An Insurance with a target price of HKD 56.92.
Haitong Securities: Giving a rating of 'outperform' for Ping An Insurance with a reasonable value range of HKD 53.10-57.18.
Founder Securities: Maintaining a 'strongly recommended' rating for Ping An Insurance.
Huatai Securities: Maintaining a 'buy' rating for Ping An Insurance with a target price of HKD 69.
CICC: Maintains a rating of 'outperform the market' for Ping An Insurance with a target price of HKD 55.65.
China Securities Co., Ltd.: Maintains a "buy" rating on Ping An Insurance, with a target price of 53.8 Hong Kong dollars.
Everbright Securities: Maintains a "buy" rating on Ping An Insurance.
Northeast Securities: Gives a "buy" rating to Ping An Insurance.
China Merchants Securities: Maintains a "strong recommendation" rating on Ping An Insurance, with net income growth slightly exceeding expectations.
China Merchants Securities released a report stating that Ping An Insurance disclosed its 2024 interim report, achieving life insurance NBV of 22.32 billion, +11.0% year-on-year on a comparable basis; net profit attributable to equity holders was 74.619 billion, up by 6.8% year-on-year.
Research reports indicate that net income growth slightly exceeded expectations, with bright spots in various business segments: 1) Life insurance NBV is focusing on price to increase volume, human resources scale bottoming out and rebounding, expecting double-digit growth in NBV for 2024 Q3 and the entire year. 2) Property insurance COR optimized year-on-year, significantly reducing the impact of guarantee insurance on overall business quality. 3) Banking business operation is stable, and technology and asset management business are marginally improving. 4) Insurance fund investment adheres to a balanced and steady layout, equity asset performance improving, driving a slight increase in investment returns. As of the end of June, the company's insurance fund investment asset size exceeded 5.2 trillion, growing by 10.2% compared to the beginning of the year; among them, the scale of stocks measured at fair value with changes included in other comprehensive income was 206.035 billion, rising by 0.3 percentage points to 4.0% of total investment assets compared to the beginning of the year. 5) The company has long been focused on shareholder returns, maintaining a stable cash dividend level and will distribute a 2024 interim dividend of RMB 0.93 per share in cash to shareholders, unchanged year-on-year.
The bank maintains a "strong recommendation" investment rating on Ping An Insurance. As of August 22, the company's TTM dividend yields in A/H shares were 5.79% and 7.76%, significantly higher than other industry peers; public fund holdings as of the end of the second quarter were only 0.18%, significantly underweighted, with relatively small funding pressure. We expect the company's EV per share to be 80.92 yuan by the end of 2024, with the current stock price corresponding to only 0.52x PEV, expecting a large upside potential in the future.
Guotai Junan Securities: Maintains a "shareholding" rating on Ping An Insurance, creating a new growth engine for comprehensive finance 2.0.
GTJA Securities stated in its report that it maintains a 'buy' rating for Ping An Insurance. It is supported by a steady dividend and forms a valuation. The target price is HKD 56.92, corresponding to a P/EV of 0.69 times in 2024.
The research report indicates that the profits meet expectations and the comprehensive financial 2.0 creates a new growth engine. 1) NBV meets expectations and proposes a deepening transformation of the 'customer operations' strategy. The mid-term life insurance NBV increases by 11.0% year-on-year, mainly due to the improvement of new business value rate, which increases by 6.5% to 24.2% year-on-year. The company's 'comprehensive financial 2.0' strategy transforms from 'cross-selling' to 'customer operations' strategy, and empowers the insurance business through the combined strengths of 'channels + products + customers' to create new growth momentum. 2) Property insurance COR improves and investment yield remains stable. In the first half of 2024, the property insurance comprehensive cost rate improved by 0.2% to 97.8% year-on-year, mainly due to the continuous contraction of the guarantee insurance underwriting scale, leading to a decrease in underwriting losses. On the investment side, the concentrated allocation of dividend assets and the increase in bond yields contributed to the year-on-year increase of 0.1% to 4.2% in the company's annualized comprehensive investment yield, and the total investment yield increased by 0.1% to 3.5% year-on-year.
Haitong Securities: Maintains a 'outperform' rating for Ping An Insurance. Achieve double-digit growth under high base for NBV.
Haitong Securities stated in its report that it is positive about the gradual release of reform achievements of Ping An Life Insurance, the continuous improvement of the quality and state of the team, the long-term performance growth empowered by the advantages of comprehensive finance and the layout of the medical and health ecology. At the closing date of August 22, 2024, the company's stock price corresponding to 2024E PEV is 0.51 times. The bank gives a PEV of 0.65-0.7 times the 2024E, with a reasonable value range of HKD 53.10-57.18, and an 'outperform' rating.
The research report indicates that 1) life insurance/property insurance/banking net profit is increasing, and the marginal balance of life insurance contract services has rebounded compared to the beginning of the year. 2) For life insurance, the mid-term NBV under comparable calibre increases by 11.0% YoY; the scale of agents increases MoM, and the per capita efficiency increases significantly. 3) For property insurance, the underwriting loss of credit guarantee insurance narrows down, and the comprehensive cost rate improves YoY. 4) For investment, the allocation of bond and equity assets improves, and the investment yield of total and comprehensive improves.
Founder Securities: Maintains a 'strong buy' rating for Ping An Insurance. The value continues to grow under a high base.
Founder Securities stated in its report that it maintains a 'strong buy' rating for Ping An Insurance. The company's performance in the first half of the year is growing steadily, and cash dividends remain stable. NBV of life insurance maintains a high growth rate under a high base, and the team achieves high-quality development. The external growth of the bancassurance channel doubles, and the efficiency of value transformation is significant. The performance of equity assets on the investment side has improved compared to the same period last year, and the fair value change loss has improved significantly. With the continuous downward adjustment of interest rates and the low base of profits in the same period, the company's value and profit growth are expected to continue to accelerate. It is expected that the mother's net profit for 2024-2026 will be CNY 107.2 billion, CNY 122.7 billion, CNY 138.6 billion, an increase of 25.2%, 14.4%, and 13.0% YoY. NBV for 2024-2026 will be CNY 44.8 billion, CNY 50.4 billion, CNY 56.4 billion, an increase of 14.1%, 12.5%, and 11.8% YoY. The corresponding 2024-2026E dynamic PEV valuations are 0.50, 0.49, and 0.45 times.
The research report states that Ping An Insurance disclosed its 1H24 performance, which meets expectations. 1) Life insurance business: the value maintains double-digit growth under a high base. The value of individual insurance channels continues to improve, manpower stabilizes, and production capacity increases. Bancassurance channels continue to benefit from the bank's integration, with high value growth. The quality of business and technology empowerment, together with grid refinement, continues to improve retention. 2) Property insurance business: expense ratio continues to improve, and COR for auto insurance increases due to catastrophic events. 3) Asset side: investment yield remains stable, and real estate exposure continues to decline. 4) Value-added services create a business moat, and the effect of medical and retirement services is obvious.
HTSC: Maintains Ping An Insurance's target price of 69 Hong Kong dollars and "buy" rating, with core profitability recovering.
HTSC stated in the report that Ping An Insurance's earnings per share in the first half of the year increased by 7% year-on-year to 4.21 yuan. The NBV of life insurance business grew by 11% year-on-year under comparable base, showing resilience and a recovery in core profitability. The comprehensive cost ratio of Ping An Property & Casualty Insurance slightly improved to 97.8%, maintaining a healthy level. Adjusting the earnings per share forecast for 2024 to 2026 to 7.24 yuan, 7.43 yuan, and 7.93 yuan due to investment fluctuations, compared to the previous values of 7.03, 7.85, and 8.23 yuan. HTSC maintains the target price of 69 Hong Kong dollars and a "buy" rating.
CICC: Maintains Ping An Insurance's "outperform the market" rating, with a profit inflection point possibly appearing.
CICC's report indicates that Ping An Insurance's first-half performance meets expectations. The trend of improvement in the core life insurance business is evident, with various indicators of Ping An Life Insurance trending positively, leading to an optimistic outlook on the company's future operations. CICC also mentioned that the profit potential of Ping An Property & Casualty Insurance is recovering. Given the improving trend in the main business of Ping An Insurance and its operational advantages, the low base caused by past asset management business impairment, and potential future impairment levels, CICC believes that the profit inflection point of Ping An Group may have appeared, enhancing the certainty of future dividend growth. CICC maintains its profit forecast, with an "outperform the market" rating and a target price of 55.65 Hong Kong dollars.
CSC: Maintains a "buy" rating on Ping An Insurance, bullish on the company's long-term value.
China Securities Co., Ltd. released a report stating that policy support has improved the competitive environment of the life insurance industry, bullish on the improvement of Ping An Insurance's value rate driving continuous growth in new business value. Various regulatory policies such as the integration of reporting and governance, the downward adjustment of guaranteed interest rates, and the establishment of a dynamic adjustment mechanism for guaranteed interest rates guide the life insurance industry towards high-quality development. The company's agency number at the end of the first half of the year has turned positive compared to the end of the first quarter, showing a stabilizing trend. The subsequent reduction in the size of the agent team is expected to gradually reduce the drag on the overall business scale, and the continuous release of the effects of previous reforms is expected to improve the production capacity of the agent team. In the long run, the comprehensive financial model and medical retirement strategy have built a solid moat for the company, bullish on the company's long-term value. It is expected that the NBV growth rates of the company in 2024/2025/2026 are 11.7%/11.3%/11.6% respectively, giving a target price of 53.8 Hong Kong dollars for the next 6 months, corresponding to a PEV of 0.65 times in 2024, maintaining a "buy" rating.
Everbright: Maintains a "buy" rating on Ping An Insurance, with the potential for new business value to remain positive.
Everbright Securities' report points out that Ping An Life Insurance continues to deepen its "4 channels + 3 products" strategy, comprehensively strengthen channel construction, enhance business quality, and rely on the group's medical health ecosystem to layout "insurance + health management", "insurance + home care", and "insurance + high-end pension". By enhancing differentiation and competitive advantages through "insurance + services", customers who enjoy the rights and interests of the medical retirement ecosystem in the first half of 2024 contributed new business value (NBV) accounting for 68.7% (with medical health rights accounting for 30.4% and retirement rights accounting for 38.3%), an increase of 0.7 percentage points year-on-year. With the gradual launch of diversified products and the continuous release of enhanced service effects, NBV is expected to maintain a positive trend, driving further valuation upgrades. Everbright Securities maintains the company's net profit attributable to shareholders for 2024-2026 at 102.4/107.7/112.2 billion yuan respectively. The current A/H share prices correspond to a 24-year PEV of 0.52/0.39, maintaining a "buy" rating on both A/H shares.
Northeast Securities: Gives China Ping An a "buy" rating, with a significant increase in new business value.
Northeast Securities report: China Ping An achieved total revenue of 494.966 billion yuan in the first half of 2024, an increase of 1.3% year-on-year; net income attributable to shareholders reached 74.619 billion yuan, an increase of 6.8% year-on-year. The new business value in the first half of 2024 reached 22.32 billion yuan, an increase of 11% year-on-year. Premium income from personal insurance business maintained steady growth, and the increase in new business value rate drove the increase in NBV. The bank stated that as a leading company in the insurance industry, China Ping An has significant competitive advantages. It is expected that the net income attributable to shareholders will be 105.33 billion yuan, 117.62 billion yuan, and 129.35 billion yuan in 2024, 2025, and 2026 respectively, corresponding to PEV valuations of 0.52/0.48/0.44 times. It is given a "buy" rating.