20220826-招银国际-众安在线-06060.HK-1H22_UW_margin_further_improved_5页_1006kb

报告摘要

ZhongAn (6060 HK) Summary

Core Content Overview

ZhongAn Insurance, listed as 6060 HK, reported improved underwriting margins and profitability in the first half of 2022 (1H22), despite challenges from market volatilities and foreign exchange (FX) losses. The company's combined ratio improved by 0.2 percentage points (ppt) year-over-year (YoY) to 99.2%, contributing to a 63% YoY increase in underwriting profit to RMB81mn. The technology export business saw a significant reduction in net losses, narrowing to RMB16mn from RMB137mn in 1H21, driven by an increase in new contracted customers (57 from 44).

The virtual banking unit experienced a 107% YoY revenue growth, maintaining its position as the largest virtual bank in Hong Kong. However, group net earnings were negatively impacted by a RMB212mn decline in investment returns and RMB313mn FX losses. Analysts expect the top-line growth momentum to improve in the second half of 2022 (2H22), alongside further enhancements in the underwriting margin.

Key Financial Highlights

Premium Income Growth: 6.8% YoY in 1H22, with health, digital lifestyle, and auto segments showing strong growth.
Segment Growth:
- Health: 10.3% YoY growth in premium income, with a 5% YoY increase in ARPU and higher top-up/renewal ratio.
- Digital Lifestyle: 14% YoY growth, primarily due to a 18.6x YoY increase in shipping return premiums.
- Auto: Rebounded by 41% YoY, indicating improved performance in this segment.
Underwriting Margin: Continued improvement, driven by the expansion of proprietary channels, which contributed 22% of premium income in 1H22.
Expense Ratio: Decreased by 7ppt YoY to 43.0%, with a notable decline in channel fees ratio (6.5ppt YoY).
Loss Ratio: Increased slightly to 56.2% in 1H22, reflecting a 6.8ppt YoY rise.

Valuation Metrics

P/S (Price-to-Sales) FY22E: 1.3x
P/B (Price-to-Book) FY22E: 1.4x
EPS (Reported): RMB0.2 in 1H22, with a YoY decline of 69.3%.
Consensus EPS: RMB2.0 in FY22E, RMB2.3 in FY23E, and RMB2.6 in FY24E.
ROE (Return on Equity): Expected to rise to 10.2% in FY24E, reflecting improving profitability.
Target Price: HK$29.39, with an upside potential of 34.5% from the current price of HK$21.85.

Key Drivers of Performance

Proprietary Channels: Expanded by 6ppt YoY, contributing to improved distribution efficiency and a 15% YoY increase in ticket size.
Customer Growth: Paying customers increased by 30% YoY, indicating stronger direct sales capabilities.
Technology Export: Overseas business grew in scale and quality, with recurring income increasing to 49% of overseas revenue.
Market Position: Maintained as the largest virtual bank in Hong Kong, driving growth in the virtual banking unit.

Analyst Recommendation

Rating: BUY (Maintain)
Target Price: HK$29.39
Upside Potential: 34.5%

Share Performance

1-Month Return: 10.6%
3-Month Return: -17.4%
6-Month Return: -17.1%

Shareholding Structure

Ant Group: 13.5%
Tencent Computer System: 10.2%

Market Capitalization and Financial Ratios

Market Cap: HK$31,027.0 million
Average 3-Month Trading Volume: 23.3 million HKD
52-Week High/Low: HK$38.20 / HK$18.42

Risk and Disclaimer

This report contains general market analysis and is not tailored to individual investors. It is for informational purposes only and should not be construed as an offer or solicitation to buy or sell any securities. The information is based on publicly available data and is subject to change. CMBIGM is not a registered broker-dealer in the U.S. or Singapore, and the report may not be distributed to non-qualified recipients without prior consent.