20220830-招银国际-中国太保-02601.HK-VNB_growth_turned_positive_in_June_5页_1011kb

报告摘要

CPIC (2601 HK) Summary

Core Content

CPIC (2601 HK) reported its 1H22 results, highlighting a positive shift in performance despite challenges from the pandemic. The company's OPAT (Operating Profit After Tax) grew by 10% YoY, driven by a 23% increase in P&C (Property and Casualty) OPAT and a 6% growth in Life OPAT. However, net profit declined by 23% YoY to RMB13.3bn, representing 58% of the FY22E forecast.

The key focus of the report is the recovery of new business momentum, particularly in the Life segment, which showed sequential improvement in 2Q22. Notably, monthly VNB (Value-Based New Business) growth turned positive in June, and the report anticipates this trend to continue into 2H22. The insurer has proactively upgraded its agency force, contributing to this recovery. Despite a 45.3% YoY decline in VNB in 1H22, the momentum is expected to stabilize.

Main Points

OPAT Growth:
- 10% YoY growth in 1H22, driven by P&C and Life segments.
- P&C OPAT grew 23%, Life OPAT grew 6%.
Net Profit:
- Declined 23% YoY to RMB13.3bn.
- Represents 58% of the FY22E forecast.
VNB Recovery:
- Monthly VNB growth turned positive in June 2022.
- VNB decreased 45.3% YoY in 1H22, but new business momentum improved sequentially.
- The report anticipates the recovery to sustain through the rest of the year.
Agency Reform Progress:
- Total agent numbers declined in 1H22, but high-productivity agents rebounded by 21% HoH.
- Productivity and first-year commission income of high-productivity agents increased by 23.5% and 10.8% YoY, respectively.
P&C Performance:
- Combined ratio improved by 2.1pts YoY to 97.2%, slightly better than the industry average of 97.3%.
- Both auto and non-auto underwriting margins expanded YoY.
- Auto combined ratio improved by 2.4pts to 96.6%, non-auto by 1.6pts to 98.3%.
- Premium income grew 12% YoY, outperforming the industry's 9% growth.
Valuation:
- CPIC-H is trading at 0.3x P/EV and 0.6x P/BV for FY22E, indicating a historical trough valuation.
- The report believes the downside is limited, and the recovery in VNB momentum will support share price performance.
- Maintains a BUY rating with a target price of HK$25.19, representing a 54.4% upside from the current price of HK$16.32.

Key Financial Metrics (1H22)

Metric	1H21	1H22	YoY Change
OPAT (RMB mn)	18,279	20,096	+9.9%
Net Profit (RMB mn)	17,304	13,301	-23.1%
P&C OPAT	3,503	4,320	+23.3%
Life OPAT	12,873	8,860	-31.2%
Group Embedded Value (RMB)	474,431	509,078	+7.3%
Net Investment Yield (%)	4.1	3.9	-0.2 ppt
Total Investment Income (RMB mn)	49,340	38,550	-21.9%
Combined Ratio (%)	99.3	97.2	-2.1 ppt
Premium Income (RMB mn)	81,561	91,571	+12.3%
Underwriting Profit (RMB mn)	443	1,949	+340%

Shareholding and Stock Data

Shareholding Structure:
- China Baowu Steel Group: 14.1%
- Shenergy (Group): 13.8%
Stock Data:
- Market Cap: HK$45,510.0 million
- 3-Month Trading Range: HK$17.5 million
- 52-Week High/Low: HK$25.80 / HK$15.54
- Total Issued Shares: 2,775.0 million

Financial Highlights (FY20A - FY24E)

Year	Net Profit (RMB mn)	EPS (Reported)	YoY Growth (%)	Group Embedded Value (RMB)	P/EV	P/BV	Dividend Yield (%)	ROE (%)
FY20A	25,352	2.6	-14.1%	47.7	0.3	1.0	5.9	12.5
FY21A	27,618	2.8	+6.1%	51.8	0.3	1.0	4.4	12.1
FY22E	23,405	2.4	-15.3%	56.0	0.3	0.6	5.9	9.9
FY23E	28,081	2.8	+20.0%	61.9	0.2	0.5	7.1	11.3
FY24E	34,119	3.4	+21.5%	68.4	0.2	0.5	8.6	12.4

Analyst Ratings

CMBIGM Rating: BUY
Target Price: HK$25.19 (Previous TP: HK$25.19)
Up/Downside: 54.4%

Risk and Disclaimer

The report contains general information and is not tailored to individual investors.
Past performance does not guarantee future results.
CMBIGM is not liable for any losses incurred from reliance on the report.
The information is subject to change without notice.
CMBIGM may have conflicts of interest and may make investment decisions inconsistent with the report.