Key points of investment
The company's cumulative original insurance premium revenue for the first 3 months before the announcement was 253,031 billion yuan, up 1.32% year on year, down from 7.47% growth rate in '23. This includes 54.518 billion yuan for life insurance, 173,977 billion yuan for financial insurance, and 24.536 billion yuan for health insurance.
(1) In the first 3 months, the growth rate of financial insurance premiums slowed down from 10.2% in the same period last year to 3.8% this year. With the exception of corporate insurance and cargo insurance, all other financial insurance types declined sharply year over year. Among them, the growth rate of vehicle insurance declined from 6.5% to 1.9%, contributing only an increase of 1,307 billion yuan, while the growth rate of eHealth Insurance fell from 9.8% to 6.2%, contributing an increase of 3.307 billion yuan. (2) Life insurance was -8.2% year-on-year, mainly due to a decrease of 5.963 billion yuan in revenue in the first year of long-term insurance payments, compared to -33.4%. This may be related to the “integration of reporting and banking” of banking insurance channels and the company's active optimization of the logistics business structure. (3) Health insurance increased by 8.2%, mainly short-term insurance increased by 15.5%, contributing an increase of 1,426 billion yuan.
Investment advice
On the one hand, it was affected by the current stricter regulatory policies such as “integration of reporting and banking” in banking insurance channels, and at the same time, due to the impact of last year's high base, there was some pressure on production insurance and life insurance in the first quarter. On the other hand, the company continues to actively optimize its business structure. On top of an increase of 1.4 percentage points in 23, the share of revenue from non-car insurance services increased by 15.58 percentage points in the first quarter of '24, and the business structure was more balanced. The share of first-year premiums paid during life insurance increased by 0.8 percentage points in the first quarter. On the basis that the premiums for the first year of the People's Insurance Health Term payment increased by 34.1% year on year 23, which became the main driving force for business growth, there was another 48.1% year-on-year increase in the first quarter. It can be seen that at a critical moment when the industry is experiencing a long period of decline, the company's continuous efforts for steady growth and excellent structure are continuing to bear fruit. We believe that the company's net profit growth rate in '24 is expected to return to normal levels. EPS is expected to be 0.60/0.68/0.74 yuan/share in 24-26, maintaining an increase rating.
Risk warning:
Product sales fell short of expectations, equity markets continued to fluctuate, large-scale natural disasters broke out again, and long-term interest rates declined.