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中国财险(2328.HK)2024年三季报点评:投资驱动利润增速回正 综合成本率略有承压

China Financial Insurance (2328.HK) 2024 Third Quarterly Report Review: Investment-driven profit growth is recovering, and the comprehensive cost ratio is under slight pressure

Changjiang Securities ·  Nov 2, 2024 02:27

Description of the event

China Financial Insurance disclosed its 2024 three-quarter report, achieving net profit of 26.75 billion yuan, a year-on-year increase of 38%; achieving a comprehensive cost ratio of 98.2%, an increase of 0.3 pcts over the previous year.

Incident comments

The return on investment drove the profit growth rate back to normal. The company achieved net profit of 26.75 billion yuan in the first three quarters of 2024, an increase of 38.0% year on year, which is a significant improvement over the performance of the first half of the year, which fell 8.7% year on year. Specifically, the improvement in profit performance is mainly due to a recovery in market performance and an improvement in investment income: the total return on investment was 27.498 billion yuan, an increase of 11.358 billion yuan over the previous year; the reflection is that in terms of return on investment, the total return on investment without annualization was 4.4%, an increase of 1.7 pct over the previous year.

The revenue growth rate of financial insurance services increased. In the first three quarters of 2024, the company achieved insurance service revenue of 364.306 billion yuan, an increase of 5.3% over the first half of the year; among them, car insurance service revenue was 219.511 billion yuan, up 4.7% year on year, down from 5.3% in the first half of the year; revenue from non-car insurance insurance services was 144.795 billion yuan, up 6.1% year on year.

The overall cost ratio was under year-on-year pressure due to natural disasters. In the first three quarters of 2024, the company achieved a comprehensive cost ratio of 98.2%, an increase of 0.3 pct over the previous year. Among them, the comprehensive cost ratio of car insurance was 96.8%, an improvement of 0.6 pct over the previous year; the comprehensive cost ratio of non-car insurance showed underwriting losses of 100.5%, which worsened 1.9 pcts year over year. Expected deterioration in non-car insurance performance is mainly affected by rain, snow and freezing disasters in the first quarter, as well as natural disasters such as torrential rain and typhoons in the second and third quarters.

Solvency is leading, and future dividend capacity can be expected. By the end of the third quarter, China's financial insurance core solvency ratio was 201.6%, which was higher than the level of listed peers and regulatory requirements. Solvency is a core indicator of insurance industry supervision. Whether it is debt-side business development, asset allocation ratios, or dividends, insurance companies' ability to pay is limited by their ability to pay. A high solvency ratio, on the one hand, gives the company more room for operating independently, and on the other hand, it is also a guarantee and motivation for continuous dividends in the future.

I'm optimistic about the double click space for future assets and liabilities. Although natural disasters such as blizzard freezing rain in the first quarter and subsequent typhoons and torrential rain put a slight pressure on underwriting performance, short-term factors such as natural disasters and market fluctuations did not affect the company's steady fundamentals and profitability. At the same time, along with increased supervision of market competition, it is judged that the medium- to long-term concentration of the industry will continue to rise, and I am optimistic about room for improvement on both sides of the company's financial burden and upward valuation.

Risk warning

1. Major adjustments to industry policies;

2. The equity market fluctuated greatly, and interest rates declined sharply.

The translation is provided by third-party software.


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