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中国财险(02328.HK):投资驱动利润增速亮眼 大灾影响下承保表现承压

China Financial Insurance (02328.HK): Investment-driven profit growth is impressive, and underwriting performance is under pressure due to the impact of the disaster

swhy Research ·  Oct 29, 2024 23:46

Investment-driven profit growth is impressive. China Financial Insurance's net profit for the first three quarters was yoy +38.0% to 26.75 billion yuan, and Q3's net profit increased by 9.129 billion yuan to 8.259 billion yuan (-0.87 billion yuan in the same period last year), mainly benefiting from the sharp increase in total investment income brought about by the recovery of the capital market (11.358 billion yuan year-on-year increase in the first three quarters); among them, fair value changes in the first three quarters contributed positively to 7.353 billion yuan, a significant increase over the previous year 11.924 billion yuan.

Non-car insurance claims were under pressure due to the disaster, resulting in underwriting performance falling short of expectations. The company's insurance service revenue in the first three quarters was +5.3% to 364.306 billion yuan; under the impact of the disaster, the comprehensive cost ratio yoy was +0.3 pct to 98.2%, higher than expected (we had previously estimated yoy-0.66pct to 97.2%), resulting in underwriting profit yoy -12.7% to 6.443 billion yuan. Among them, the 3Q24 comprehensive cost ratio yoy+0.3pct to 102.0%, and the underwriting loss margin yoy+22.3% to 2.556 billion yuan.

Auto insurance performance was impressive: vehicle insurance service revenue yoy +4.7% to 219.511 billion yuan in the first three quarters, and the comprehensive cost ratio yoy-0.6pct was 96.8%, a further increase of 0.3 pct compared to 1H24. It is expected to mainly benefit from the continued demonstration of risk and cost control results; under the trend of rising volume and price, car insurance underwriting profit yoy +30.6% to 7.119 billion yuan. Among them, the Q3 consolidated cost ratio improved by 1.4 pct to 97.4% year-on-year in a single quarter, and underwriting profit yoy +123.1% to 1.917 billion yuan.

Non-car insurance underwriting losses under the impact of the disaster: Affected by torrential rain and strong typhoons, the 3Q24 non-car insurance comprehensive cost ratio yoy+2.3 pct to 108.3%, and the underwriting loss margin in a single quarter yoy +50.7% to 4.473 billion yuan. As a result, the non-car insurance business COR yoy +1.9pct to 100.5% in the first three quarters, and underwriting profit yoy -135.4% to -0.676 billion yuan.

The investment performance was impressive, and FVOCI's equity size increased by 3.079 billion yuan month-on-month. Benefiting from the rapid rebound in the equity market since September 24, the company's investment side performed well. The unannualized return on total investment in the first three quarters yoy was +1.7pct to 4.4%. By the end of September, the size of the company's financial assets classified as AC/FVOCI/FVTPL reached 133.167/218.964/124.665 billion yuan (balance sheet caliber, slightly different from mid-report disclosure), accounting for 27.9%/45.9%/26.1%, respectively, -1.3pct/+1.3pct/+0pct. Among them, FVOCI's equity size was 94.225 billion yuan, an increase of 3.079 billion yuan over the previous month.

Investment analysis opinion: maintain the “buy” rating and raise profit forecasts. The profit performance in the three-quarter report was impressive. We raised our 24-26 profit forecast to 32.671/34.841/38.028 billion yuan (the previous forecast was 28.539/32.483/35.951 billion yuan). As the core target of high dividends within the insurance sector, the valuation safety cushion is quite thick under the current market style; the peak of the annual disaster period has passed, and it is expected that most of the impact of the disaster will be reflected in the three-quarter report. The company continues to promote high-quality transformation, and the combination of optimizing the business structure, reducing operating costs, and improving risk identification capabilities is expected to continue to show results, and business advantages are expected to continue to show. As of October 29, the company's PB (24E) was 0.97x, maintaining a “buy” rating.

Risk warning: Long-term interest rates have declined, the equity market has fluctuated greatly, the impact of the disaster has exceeded expectations, and regulatory policies are becoming stricter.

The translation is provided by third-party software.


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