China Pacific Insurance (601601) Half-yearly Report Review 2019: Tax Cuts + Investment Driven Performance Growth, New Orders Decreased Narrowly

China Pacific Insurance (601601) Half-yearly Report Review 2019: Tax Cuts + Investment Driven Performance Growth, New Orders Decreased Narrowly

1.

The event company released its semi-annual report for 2019.

2.

Our analysis and judgment 1) Driven by tax reductions and improved investment income, the company’s performance increased by more than 90% in 2019H1, and the company’s total revenue reached 2203.

86 ppm, a ten-year increase of 7.

67%; realized net profit of 161.

8.3 billion, an increase of 96 in ten years.

1%; basic EPS 1.

79 yuan, an annual increase of 96.

1%; expected average ROE is 10.

1%, an increase of 4 per year.

3 units.

The group’s embedded value is 3651.

1.6 billion, an increase of 8 over the end of last year.

62%.

The company’s performance is very good, mainly benefiting from the impact of the insurance industry’s pre-tax substitution and replacement policies on insurance fees and commission expenses and the significant improvement in investment income.

2) Negative growth in the value of new business, the decline in new orders narrowed in the second quarter, the optimization of business structure was affected by adjustments in product sales strategies, negative growth in new orders, and pressure on new business value performance.

In 2019H1, the company’s life insurance business realized new business value of 149.

27 ‰, an average of 8 in ten years.

36%; new business value rate 39.

0% twice a year.

4 units; new single premium 263.

50,000 yuan, 10-year average of 10.

1%.

CPIC Life’s product sales strategy was adjusted, focusing on value, team, and empowerment. In the first half of the year, the business rhythm shifted to balanced development, and the decline in new insurance in the second quarter narrowed.

In Q2 2019, the company realized a new single premium of 88.

63 ppm, 10-year average3.

43%, compared with 13 in the first quarter.

The 1% reduction was significantly improved.

The product structure was further optimized, and the pulling effect of renewal business was obvious.

In 2019H1, the company realized renewal premium income of 1006.

74 ppm, a 13-year increase of 13.

5%, accounting for 72% of total premiums.

73%, an increase of 5 per year.

The 02 singles are the main driving force for the growth of premium income in the first half of the year.

Revenue from traditional insurance business was 485.

73 ppm, an increase of 17 in ten years.

8%, accounting for 35% of total premiums.09%, an increase of 3 per year.

63 units; of which, long-term health insurance 277.

170,000 yuan, an increase of 56 in ten years.

0%, accounting for 20% of total premiums.

02%, an increase of 6 a year.

46 units.

The increase in the proportion of income from guaranteed products is expected to improve the current situation of the growth rate of new business value and promote value growth.

The scale and quality of agents improved.

As of the end of June 2019, the average monthly manpower of the company’s agents was 79.

60,000 people, a year-on-year decrease of 11%; the average monthly healthy manpower and the monthly average manpower are 30.

90,000 and 16.

80,000 people, accounting for 38.

8% and 21.

1%; monthly per capita insurance business income is 5,887 yuan, and will increase by 5 in the future.

0%.

The company has adopted various breakthroughs such as optimizing the recruitment of talents, strengthening skills training, and consolidating basic management to promote business development and increase production capacity.

3) The property and casualty underwriting end maintained profitability. The business structure continued to be optimized in 2019H1. CPIC Property & Casualty achieved business income of 682.

470,000 yuan, an increase of 12 in ten years.

46%, of which motor vehicle insurance and non-motor vehicle insurance 佛山桑拿网 respectively achieved business income of 461.

33 ppm and 221.

1.4 billion, an increase over the same period last year.

19% and 31.

4%.

The property and casualty underwriting end remained profitable, and the comprehensive cost ratio decreased.

In 2019H1, the company’s comprehensive cost ratio of property insurance business was 98.

6%, a decline of 0 per year.

1 single, of which the comprehensive cost ratio of auto insurance business is 98.

4%, an increase of 0 over the same period last year.

4 single, non-auto insurance business comprehensive cost ratio of 99.

5%, a decrease of 2 over the same period last year.

2 units.

The business structure continued to be optimized, and the contribution of non-auto insurance business increased.

In 2019H1, the company’s auto insurance revenue accounted for 67%.

淡水桑拿网60%, ten years ago4.

67 digits; 32% of non-auto insurance income.

40%, up 4 each year.

67 units.

The increase in the proportion of non-auto insurance business mainly benefited from the rapid development of health insurance, agricultural insurance and liability insurance.

In 2019H1, the company’s health insurance, agricultural insurance and liability insurance increased by 73 each year.

28%, 48.34%, 22.

96%.

4) Benefiting from the recovery of the equity market and the increase in solid income, the investment income as a whole improved in 2019H1, and the company’s investment assets were 13,562.

82 ppm, an increase of 10 over the same period last year.

0%.

Among them, fixed income investment accounted for 82%.

6%, reducing by 0 every year.

5 shares; equity investment accounts for 13.

7%, up by 1 each year.

2 units.

Affected by the increase in interest income and the recovery of the equity market, the company’s net return and total investment return have both improved.

The company’s net investment yield reached 4 in the first half of the year.

6%, an increase of 0 over the same period last year.

One single, mainly due to the annual increase in interest income from fixed investment of 17%.

35%; total investment yield is 24.

7%, an increase of 0 over the same period last year.

3 per share, mainly due to the increase in securities trading income and increase in fair value gains92.

52% and 158.

32%.

3.

Estimates and investment recommendations The company’s life insurance business is centralized and protected, adheres to risk management protection and long-term economical business, actively adjusts product sales strategies, more balanced sales rhythm, the proportion of guaranteed business increases, and the value of new business can be expected to improve; underwriting insuranceEnd to maintain profitability, and the business structure continued to optimize.

Based on the company’s fundamentals and sustainable resilience, we give a “recommended” rating and predict that the embedded value per year for 2019/2020 will be 42.

66/49.

06 yuan, corresponding to 2019/2020 PEV is 0.

91X / 0.

79X.

4.

Risks indicate the risk of the long-term interest rate curve moving downwards, and the risk of insurance product sales falling short of expectations.