2023Q1 NBV is superior to its peers year over year, and is expected to maintain its leading edge throughout the year. The “buy” rating company disclosed the 2023-1 quarterly report, 2023Q1 NBV was 3,971 billion yuan, +16.6% year on year, higher than the listed industry, slightly lower than our previous expectations, continuing the year-on-year growth trend in a single quarter since 202Q3; the net profit of the parent company was 11.626 billion yuan, +27.4% year on year, mainly driven by the good performance of equity market investment earnings. Considering the deepening transformation of the company's life insurance channels to “three major” and maintaining a high increase after the bank insurance channel was restarted, we maintained the 2023-2025 NBV year-on-year forecast to +7.9%/+8.3%/+8.6%, corresponding to the EV growth rate of 9.3%/9.4%/9.5%, and maintained the net profit forecast for 2023-2025 at 274/297/35 billion, +11.3%/+8.4%/+17.9%, respectively. The corresponding EPS was 2.9/3.2/3.7 yuan respectively. The year-on-year growth rate of the company's life insurance NBV is superior to that of peers. The leading edge is sustainable, and the life insurance transformation is relatively leading. The core team size has gradually stabilized, and the core human per capita income has increased. It is expected that NBV in 2023 will grow at a year-on-year rate or lead the industry. The current stock price corresponding to PEV in 2023-2025 is 0.5/0.5/0.4 times, respectively, maintaining the “buy” rating.
The premium structure for new orders has improved, and the margin is expected to increase. Life insurance transformation has entered a new stage. The company's 2023Q1 life insurance scale premiums are 108.457 billion yuan, -3.8% year on year, new individual insurance premiums of 12.277 billion yuan, of which is 8.443 billion yuan, +4.2% year on year, new banking insurance policy premiums of 11.145 billion yuan, -17.1% year on year. It is expected that the product structure will improve, the overall margin may increase, confirming that the overall margin may increase The company's life insurance transformation is relatively leading, and its ability to sell high-value products through channels has improved. Looking at the transformation of life insurance, the size of the core team gradually stabilized, and the share increased. The per capita income increased year-on-year. At the same time, the retention rate of newcomers was optimized in September, and the policy continuation rate of personal life insurance customers increased markedly by 6.8 pct to 95.9%. The effects of the transformation gradually became apparent, and the “chip” model gradually advanced to the “model forming” stage.
Underwriting profit under the new standards accounted for 54.8%, which is relatively high. Financial insurance COR improved. Under the new standards, the company's 2023Q1 underwriting profit was 9.35 billion yuan, accounting for 54.8%, +7.9% year on year, and investment profit of 7.70 billion yuan, +88.2% year on year. It is estimated that the company's death and fee spreads are superior to most listed peers, slightly lower than that of Ping An, China, and is at a relatively high level. The 2023Q1 company's financial insurance premium revenue was 57.54 billion yuan, +16.8% year on year, COR 98.4%, down 1.2pct from the previous year. Among them, non-car insurance premiums were 32.65 billion yuan, +27.4% year on year, car insurance 25.90 billion yuan, +6.0% year on year. Auto insurance accounted for 45%, lower than non-car insurance.
Risk warning: Long-term interest rates have declined more than expected; life insurance transformation is progressing more slowly than expected.