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Ping An of China (601318) 2019 First Quarterly Report Review: Life Insurance New Business Value Rate Increases Significantly

Ping An of China (601318) 2019 First Quarterly Report Review: Life Insurance New Business Value Rate Increases Significantly

Event In the first quarter of 2019, Ping An of China realized operating profit attributable to its mother 341.

19 trillion, an increase of 21% a year; net profit attributable to mother 455.

170,000 yuan, an increase of 77 in ten years.

1%, if calculated according to the financial instrument accounting standards before the insurance subsidiary’s implementation of the amendment, the group’s net profit attributable to its parent is 318

18 ppm, a ten-year increase4.

2%.

New life and health insurance business value 216.

42 ppm, an increase of ten years6.

1%, the new business value rate is 36.

8%, an increase of 5 per year.

9pct; the comprehensive cost ratio of property and casualty insurance is 97%, increasing by 1 every year.

1pct.

The company’s annualized total investment yield in the first quarter was 5.

1%, increase by 1 every year.

4pct, net investment yield 3.

9%, increasing by 0 every year.

2pc; if calculated according to the financial instrument accounting before the insurance subsidiary implements the amendment, the annualized total investment return rate is 3.

8%, a decline of 0 per year.

1pct.
Investment Points 1.

The recovery in the equity market drove performance growth beyond expectations. The new accounting standards of IFRS9 amplified profit growth in the first quarter of 2019. The apparent recovery in the equity market drove the company’s investment recovery, and positive feedback was formed under I9.

The company achieved net profit of 455.

170,000 yuan, an increase of 77 in ten years.

1%, if calculated according to the financial instrument accounting standards before the insurance subsidiary’s implementation of the amendment, the group’s net profit attributable to the parent is 318.

18 ppm, a ten-year increase4.

2%.

The company realized 341 operating profit.

19 trillion, a year-on-year growth of 21%, exceeding market expectations.

Among them, property insurance business income 57.

67 ppm, an increase of 77 in ten years.

3%; income from life and health insurance business was 196.

52 ppm, an increase of 19 years.

8%, slightly exceeding market expectations.

2.

The life insurance business structure was adjusted, and the new business value rate increased sharply. In the first quarter of 2019, the company’s life and health insurance original insurance premium income was 2050.

49 trillion, including a premium of 530 for new insurance policies.

67 ppm, a decrease of 13 per year.

08%; first year premium is 587.8.3 billion, down 10 a year.

8%, in line with expectations.

But the company’s new life and health insurance business is worth 216.

42 ppm, an increase of ten years6.

1%; new business value rate is 36.

8%, up 5 per year.

9pct is mainly for the company to adjust its business structure and reduce the sales of short-term storage storage products. Obviously, the sales of long-term protection and long-term protection storage hybrid products have been clearly defined. The strategy for deepening the value development is clear and continued to be promoted.

3.

The number of life insurance agents declined and the quality increased. Technology helped the team to improve the quality. At the end of the first quarter, the number of Ping An’s life insurance agents was 131.

10,000, down 7 from the end of 2018.

5%, mainly because the company strengthens the basic management work and adopts strict manpower assessment to improve the quality of the team.

In the first quarter, the company’s agency channel business organization improved, driving up the value of new business.

Ping An Life Insurance relies on the[Technology +]strategy to promote intelligent upgrades, and achieves intelligent management and technology empowerment through core applications such as[Agent AskBob].

3.

With the increase in the net profit of property and casualty insurance, the comprehensive cost ratio increased.

95 ppm, an increase of 77 in ten years.

34% is mainly due to the increase in investment income, the decline in transaction fees and the decline for many years.

The company’s property insurance original insurance premium income was 692.

20 ppm, an increase of 9 in ten years.

5%.

Among them, the original insurance premium of auto insurance was 478.

28 ppm, a ten-year increase of 8.

4%; non-motor vehicle insurance 179.

81 ppm, a ten-year increase of 7.

4%; Accident and Health Insurance 34.

110,000 yuan, an increase of 45 in ten years.

3%.

The company’s auto insurance growth rate is still fast. Subsequently, through the cancellation of car purchase restrictions, auto insurance further increased beyond expectations.

Affected by factors such as the 武汉夜网论坛 increase in the comprehensive expense ratio, the company’s comprehensive cost ratio of property insurance in the first quarter increased by 97% in one year.

1pct, can still continue in the industry.

The company continuously develops intelligent services.[510 City Speed Site Investigation]In the first quarter, the city ‘s daytime case investigation rate reached 97 in 5-10 minutes.

4%.

Ping An Property & Casualty uses AI to identify fixed loss and face recognition online compensation, and provides one-stop self-assistant compensation services for more than 60% of customers.

With the promotion of scientific and technological means, the comprehensive expense ratio of Ping An Property & Casualty Insurance is expected to decrease.

4.

The construction of the ecosystem promotes the growth of individual customers and 武汉夜生活网 Internet users, which is the basis for business development trends. At the end of the first quarter of 2019, the number of personal customers of Ping An Group.

0.91 million yuan, an increase of 3 from the end of 2018.

6%.

Among them, 11 million new customers were added in the first quarter, 31.

3% of Internet users from the five major ecosystems.Group Internet users at the end of the first quarter5.

610,000 yuan, an increase of 4 over the end of 2018.

2%, of which 4 are APP users.

9.2 billion, an increase of 3 from the end of 2018.

7%.

Of the group’s individual customers, 34.

6% of customers hold supplementary subsidiary contracts at the same time, and the technology diversion effect is obvious. We believe that the growth of the company’s personal customer base Internet user scale will serve as a good foundation for the company’s later business expansion.

5,

The equity allocation ratio was dynamically adjusted, and the investment yield rose upwards. As of the end of the first quarter of 2019, the company’s insurance fund investment scale2.

88 trillion, an increase of 3 from the end of 2018.

2%.

The company’s net investment yield in the first quarter was 3.

9%, an annual increase of 0.

2pct, which is mainly due to the increase in the continuous upward bond yields since the second half of 2018, and the company increased its investment in associates last year. The net income of associates / joint ventures increased by 21% to 47 billion in the first quarter of 2019; total investmentYield 5.

1%, rising by 1 every year.

4pct, mainly due to the rebound in the capital market has led to a substantial increase in investment income.

If calculated based on the implementation of the revised financial instrument accounting standards before the insurance subsidiary, the annualized total investment return rate is 3.

8%, a decline of 0 per year.

1pct.
In the first quarter, the company dynamically adjusted the allocation ratio of equity and assets, promoted the allocation of traditional bonds and financial products, optimized the matching of assets and liabilities, and gradually increased the company’s investment yield in the later period.

6.

Estimates and investment recommendations The company’s life insurance business structure has been continuously improved, and the value of new business has increased significantly. Property insurance has maintained a good growth rate under the pressure of the industry, and the construction of the ecological circle has continuously contributed to the company’s customers, gradually and continuously benefiting.Three years is still expected to maintain 20% growth rate, but also an important basis for future profit release.

The company continued to implement the development strategy of returning to the origin of insurance, and the company’s share repurchase and performance exceeded expectations by gradually increasing the catalytic market, which can be no more than 101.

Within the price range of 24 yuan / share, the repurchase was initiated from April 29, 2019 to April 28, 2020.

We are optimistic about the company’s long-term development prospects, and it is expected that the EPS for 2019-2021 will be 9 respectively.

21/11.

35/13.

61 yuan, corresponding P / EV is 1.

26/1.

00/0.

86 times, maintaining the “recommended” level.

Risk warning: Sino-US trade friction fluctuation risk; market drops sharply; performance is less than expected risk; long-term interest rate decline risk.