20230210-招银国际-Divergent_jumpstart_performance_among_life_insurers_10页_1mb

报告摘要

China Insurance Sector Summary

Core Content

The 2023 performance of Chinese life insurers shows significant divergence in new business growth (NBV). While most insurers continue to face challenges due to weaker-than-expected pre-sale performance during the December 2022 COVID outbreaks, China Life stands out with a strong jumpstart, attributed to its early pre-sale launch in October 2022. Additionally, CPIC and Ping An have seen a notable increase in NBV momentum since mid-January 2023, driven by enhanced agent productivity and strong demand for savings products.

Main Views

Performance Divergence: The NBV performance of life insurers varies significantly. China Life has outperformed due to its early pre-sale initiatives, while others are still recovering from the impact of the pandemic.
Agent Productivity and Demand Shift: Insurers that have proactively upgraded their agency force are better positioned to capture new business flows, leading to stronger growth compared to peers.
Valuation and Investment Outlook: The sector's valuation is currently undemanding, with some companies trading at significant discounts relative to historical averages. China Life-H (2628 HK) is highlighted as a top pick due to its strong performance and low valuation.
Rating Adjustments: Several companies have had their ratings and target prices adjusted based on improved fundamentals and updated forecasts.

Key Information

Valuation Table (FY23E & FY24E)

Name	Ticker	Mkt Cap (LC bn)	Price (LC)	P/EV (x)	P/B (x)	ROE (%)
Ping An	2318 HK	852.74	57.60	0.5 / 0.5	1.0 / 0.9	14.1 / 14.8
China Life	2628 HK	731.39	13.50	0.2 / 0.2	0.6 / 0.6	8.0 / 10.2
CPIC	2601 HK	205.39	20.85	0.3 / 0.3	0.7 / 0.6	10.8 / 11.8
NCL	1336 HK	86.49	20.05	0.2 / 0.2	0.4 / 0.4	8.3 / 11.4
Taiping	966 HK	29.56	9.79	0.1 / 0.1	0.4 / 0.3	3.1 / 7.6
PICC Group	1339 HK	208.69	2.60	0.3 / 0.3	0.4 / 0.4	11.1 / 11.2
PICC P&C	2328 HK	170.84	7.27	n.a. / n.a.	0.6 / 0.5	14.1 / 14.6
Zhong An	6060 HK	30.13	23.35	n.a. / n.a.	1.5 / 1.4	5.8 / 8.8

Stock Ratings and Target Prices (as of 8 Feb 2023)

Ticker	Rating	Target Price (LC)	Upside (%)
2318 HK	Buy	80.30	39.4%
601318 CH	Buy	69.33	42.9%
2628 HK	Buy	20.85	54.5%
601628 CH	Sell	21.60	-35.3%
2601 HK	Buy	29.72	42.6%
601601 CH	Buy	30.80	19.6%
1336 HK	Buy	27.22	35.7%
601336 CH	Sell	27.04	-10.0%
966 HK	Hold	11.83	20.9%
1339 HK	Buy	3.99	53.4%
601319 CH	Sell	4.30	-14.4%
2328 HK	Buy	12.44	71.1%
6060 HK	Buy	33.82	44.8%

Conclusion

The Chinese insurance sector is experiencing a recovery, with a clear divergence in performance among life insurers. Companies that have taken proactive steps to reform their agency structures and improve agent productivity are seeing stronger new business growth, while others lag behind due to continued challenges. The current valuation levels are seen as attractive, especially for China Life-H, which is highlighted as a top pick due to its strong NBV growth and low valuation. The overall sector is expected to outperform the market benchmark over the next 12 months, with the best performers being those that have adapted effectively to the changing market dynamics.

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