核心业务实现增长，三季度盈利同比+151.3%。2024 年前三季度，公司实现归母净利润1191.8 亿元，同比+36.1%，增幅较上半年扩大29.3pct，其中第三季度同比大幅增长151.3%，主要由寿险业务（前三季度盈利809.3 亿元，同比+35.0%）、财险业务（139.2 亿元，+39.7%）以及金融赋能业务（133.1 亿元，+475.0%）共同贡献。剔除短期投资波动及非日常营运收支等影响后，前三季度归母营运利润为1138.2 亿元，同比+5.5%，增幅较上半年扩大6.1pct，其中第三季度同比+22.1%；集团三大核心业务（寿险+财险+银行）归母营运利润同比增长5.7%，增幅较上半年扩大4.0pct。Incidents:
In the first three quarters of 2024, Ping An of China's revenue was 775.38 billion yuan, +10.0% year on year; net profit to mother was 119.18 billion yuan, +36.1% year on year; operating profit to mother was 113.82 billion yuan, +5.5% year on year; new business value 35.16 billion yuan, +34.1% year on year; annualized net return on investment 3.8%, -0.2 pct year on year; annualized comprehensive return on investment was 5.0%, +1.3 pct year on year.
Comment:
The core business achieved growth, with profit of +151.3% year-on-year in the third quarter. In the first three quarters of 2024, the company achieved net profit of 119.18 billion yuan, an increase of 29.3 pcts over the first half of the year, with a sharp increase of 151.3% year-on-year in the third quarter, mainly contributed by life insurance business (profit of 80.93 billion yuan in the first three quarters, +35.0% year over year), financial insurance business (13.92 billion yuan, +39.7%), and financial enablement business (13.31 billion yuan, +475.0%). Excluding short-term investment fluctuations and extraordinary operating expenses, operating profit attributable to parent for the first three quarters was 113.82 billion yuan, +5.5% year over year, up 6.1 pct from the first half of the year, of which +22.1% year on year in the third quarter; operating profit from the Group's three core businesses (life insurance+financial insurance+banking) increased 5.7% year on year, an increase of 4.0 pcts over the first half of the year.
Personal insurance: The results of high-quality channel development have been shown, and the increase in the value of new businesses has broadened.
1) The scale of manpower has steadily increased, and team production capacity has increased dramatically. By the end of 24Q3, the number of personal life insurance sales agents in the company was 0.362 million, +6.5% compared to the end of Q2 (+2.1% at the end of Q2 compared to the end of Q1), and the steady trend was consolidated.
Judging from the quality of the team, the NBV per capita of the company's agent channel increased by 54.7% in the first three quarters, an increase of 18.7 pcts over the first half of the year; the proportion of “excellent +” in new manpower increased by 4 pcts year on year.
2) The value of the new business was +34.1% year-on-year, and the contribution of other channels such as banking insurance continued to increase. In the first three quarters of 2024, the company achieved first-year premiums (calculated NBV caliber) of 138.62 billion yuan, a year-on-year reduction of 14.8 pcts compared to the first half of the year, with a year-on-year reduction of +50.4% in the third quarter. It is expected to mainly benefit from the reduction in the impact of scheduled interest rate switching and “integrated reporting” of banking insurance. At the same time, thanks to effective cost control, the value rate of the company's new business (based on first-year premiums) increased 7.3 percentage points to 25.4% year on year, driving the new business value increase of 34.1% to 35.16 Billions of dollars, with a sharp year-on-year increase of 110.3% in the third quarter, showing impressive performance.
By channel, the value of the new business of the company's agent/banking insurance channel increased by 31.6%/68.5% in the first three quarters, respectively, increasing by 20.8 pct/51.2 pct compared to the first half of the year; the value of the new business of the community financial service channel increased by more than 300% year on year. In the first three quarters, the company's banking insurance channels, community financial services, and other channels contributed 18.8% of Ping An Life Insurance's new business value. The contribution increased by 2.4 pct/month over month, respectively.
Property insurance: Insurance service revenue grew steadily, and the comprehensive cost ratio was optimized by 1.5pct to 97.8% year-on-year. 1) In the first three quarters of 2024, the company's property insurance service revenue increased 4.5% year-on-year to 246.02 billion yuan, an increase of 0.6 pct over the first half of the year, and the overall growth was steady. Due to segmented disclosure restrictions, car insurance premiums under the old standard increased 3.8% year over year to 160.54 billion yuan, while non-car insurance (including health insurance) premiums increased 10.6% year over year to 78.84 billion yuan.
2) Benefiting from the sharp year-on-year decline in underwriting losses in the company's guarantee insurance business, the comprehensive cost ratio was optimized by 1.5 pct to 97.8% year on year in the first three quarters. Among them, the comprehensive cost ratio of the car insurance business deteriorated 0.8 pct year over year, mainly due to the increase in debt costs due to the decline in discount rates under the new insurance contract guidelines and frequent year-on-year natural disasters such as typhoons and torrential rains.
Investment: The annualized comprehensive return on investment increased by 1.3 pct to 5.0% year over year. In the first three quarters of 2024, due to fluctuating and declining interest rates, the company's annualized net return on investment fell 0.2 pct to 3.8% year on year; however, thanks to the rapid rebound in the stock market in the third quarter, the annualized comprehensive return on investment increased 1.3 pct to 5.0% year on year.
Banks: The profit growth rate recorded 0.2%, and the non-performing rate declined steadily and slightly. In the first three quarters of 2024, Ping An Bank's operating income was 111.6 billion yuan, -12.6% year over year, +0.4 pct; net profit to mother was 39.7 billion yuan, +0.2% year over year, -1.7 pct; net interest spread was 1.93%, 3 bps narrower than 24H1; non-interest income increased 7.6% year on year to 39.1 billion yuan, with net revenue from handling fees and commissions falling 18.5% to 18.7 billion yuan year on year, and the decline was narrower than 24H1 2.1 pct. Affected by factors such as reduced fees on banking insurance channels and declining sales of equity funds, net other non-interest income increased 52.6% year-on-year to 20.3 billion, and the growth rate was 4.1 pct narrower than 24H1. It was mainly affected by the increase in income from bond investment and changes in fair value of transactional financial instruments. By the end of 24Q3, Ping An Bank's non-performing loan ratio was 1.06%, down 1bp from the end of 2q; provision coverage fell 13.1pct to 251.2% from the end of 2q, and loans fell 15 bps to 2.67% compared to the end of 2Q.
Comprehensive finance: The number of individual customers is growing steadily, and the scale of asset management continues to rise. 1) The company's comprehensive financial model continues to deepen, deeply cultivate individual customers and consolidate customer base management. By the end of 24Q3, the number of individual customers in the group was 0.24 billion, +3.8% compared to the beginning of the year; the average number of customer contracts was 2.9, 1.0% compared to the beginning of the year, which was a phased fluctuation caused by the company actively adjusting the customer base structure for credit products. 2) The company mainly carries out asset management business through companies such as Ping An Securities, Ping An Trust, Ping An Financial Leasing and Ping An Asset Management. As of the end of 24Q3, the asset management scale exceeded 7.9 trillion yuan (over 7.6 trillion yuan at the end of Q2); net profit from the asset management sector in the first three quarters was -2.32 billion yuan, a year-on-year loss reduction of 46.7%.
Profit prediction and rating: Ping An Life Insurance continues to deepen the “4 channels+3 products” strategy, comprehensively strengthen channel construction, improve business quality, and rely on the Group's healthcare ecosystem to lay out “insurance+health management”, “insurance+home care”, and “insurance+high-end pension” to enhance its differentiated competitive advantage through “insurance+service”. In the first three quarters of 2024, the proportion of NBV contributed by customers enjoying service benefits in the medical and pension ecosystem reached 69.6% (of which health care rights accounted for 30.6% and pension rights accounted for 39.0%), an increase of 0.8% year-on-year Percentage points. In the future, as diversified products are launched one after another and service support effects continue to be released, NBV is expected to maintain a positive trend and drive further upward revisions in valuation. Considering that the recovery in the equity market drove up the company's high profit growth in the third quarter and that the asset side is expected to continue to improve under the low base in the fourth quarter, we raised the company's 2024-2026 net profit to 134.3/164.7/174.1 billion yuan (previous value 102.4/107.7/112.2 billion yuan), respectively. Currently, the A/H stock price corresponds to the company's 24-year PEV of 0.70/0.56, maintaining the “buy” rating for A/H shares.
Risk warning: Economic recovery fell short of expectations; policy reforms fell short of expectations; long-term interest rates declined beyond expectations.
