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CPIC (601601): Profit slightly surpasses expectations, P & C contribution surprises, expects life insurance to improve

CPIC (601601): Profit slightly surpasses expectations, P & C contribution surprises, expects life insurance to improve

CPIC (601601): Profit slightly surpasses expectations, P & C contribution surprises, expects life insurance to improve

The company disclosed in the first quarter of 2019 that it achieved net profit attributable to mothers in Q1 201954.

79 ppm, an increase of 46 in ten years.

1%, the net assets attributable to the parent at the end of the first quarter of 2019 was 1620.

USD 900 million, an increase of 8 from the end of the previous year.


The Group’s net profit attributable to mothers was 46.

The high growth rate of 1% was slightly higher than expected, mainly due to the increase in investment yields brought by the upward movement of the equity market and the gradual increase. It is expected that the property insurance business expense rate and tax rate will improve at the same time to promote high growth of property insurance profits.

The company achieved investment income of 155 in 19Q1.

54 ppm, an increase of 28 over the same period last year.

12 ppm, a year-on-year growth of 22%, which is expected to be the main cause of the company’s high profit growth.

The company’s annualized comprehensive investment return rate (calculated) for Q1 2019 is 7.

7% (China Life / Xinhua is 11% / 7.

5%), the annualized total investment income injection4.

6% (China Life / Xinhua is 6 respectively.

71% / 4.

2%), at least 0.

4pt, annualized net investment income injection4.

4% (National Life is 4.

31%), at least 0.


At the end of the first quarter, the company’s investment assets reached 13077.

USD 800 million, an increase of 6% over the end of the previous year. The asset allocation structure remained stable. Small changes in the structure were mainly due to the rapid growth in the size of stocks and equity funds.

The company’s relatively conservative large asset allocation structure also achieved a high comprehensive investment yield in the first quarter. It is not easy. If the stock market can stabilize and recover later, the company’s current US $ 88.8 billion in equity and equity funds (accounting for 6)

7%) will lead to a two-fold improvement in the company’s return on investment.

In addition, CPIC P & C contributed net profit 8 to its mother in 19Q1.

610,000 yuan (+126 for the whole year.

7%), it is expected that the main reason is that the improvement of the underwriting expense ratio has reduced the tax rate brought about by the improvement, and at the same time, the investment income 武汉夜网论坛 has been improved to jointly promote the unexpected growth of property insurance profits.

The company’s new life insurance premiums were in negative growth, and subsequent expectations are picking up.

In the first quarter of the life insurance business, new premiums from agent channels fell by 13.

1%, mid-term new orders fell by 18.

1%, compared with the bottom of other listed insurers, is expected to be mainly due to the company’s late start of the red start and increased competition in the industry caused by new orders than expected.

Looking forward to the follow-up life insurance business, after the new position is in place, it is expected that corresponding measures will be formulated to strive to achieve a recovery of new insurance orders, and the strength of life insurance veterans cannot be underestimated.

The premium growth of the P & C insurance business is steady, and the subsequent development of non-auto insurance is expected.

The first quarter premium income of the property and casualty insurance business was 353.

6.6 billion, an increase of 12 in ten years.

7%, of which auto insurance premiums increased by 6.

3%, non-auto insurance premiums increased by 28.
The proportion of auto insurance premiums decreased from 71% in the same period last year to 67% in this year, which indicates that the current growth of property and casualty insurance business is mainly driven by non-auto insurance business, and the business structure will continue to be balanced.It is expected that the company’s auto insurance premium growth rate will be under pressure, and the gradual growth rate is expected to fall below 10%. Subsequent non-auto insurance will become the driving force for business growth. The company’s current first-mover advantage in agricultural insurance and liability insurance isAchieve sustained and rapid growth.

Looking into the future, the recovery of life insurance debt and the improvement of the investment end will promote the gradual and high growth of performance.

From the perspective of the liability side, the life insurance business performed poorly in the first quarter, and it is expected that it will improve after the new position is in place.

The property and casualty insurance business is mixed in 2019, extending the comprehensive cost rate under continued pressure, reducing the level of additional expenses and gradually improving the level, which will lead to a decline in the company’s rate of return, which will help the company’s profit to improve.It still has a very significant positive contribution to the profit growth of comprehensive property and life insurance companies. Under the background of stable market conditions, the company’s profits have achieved high growth without worry.

Investment advice: Maintain a highly recommended level.

The company’s 19Q1 profit performance exceeded expectations, but denied that the end performance was unsatisfactory.

The related business is expected to pick up after the new life insurance agent is in place. Even if there is a high base pressure in 18H2, the company’s relatively solid agent base combined with corresponding product strategies will help improve new single premiums. Property insurance businessThe annual processing fee and tax rate issues are expected to be improved, leading to a negative profit turn from positive growth; and the upward trend of the long-term interest rate trend is conducive to projected improvement.

It is expected that the company’s NBV will grow by 5% per year and EV will grow by 18% per year in 2019.

The company currently corresponds to 2019 P / EV 0.

83X, at a historically low level, with a high safety margin, and taking into account factors (continuity, interest rates, fundamentals), maintaining the target P / EV estimate at 1X level, corresponding to a target price of 44 yuan and a space of 21%.

Risk reminder: The strategic arrangement of life insurance is lower than expected, and the long-term interest rate direction declines again in the short term.