20230427-招银国际-中国平安-02318.HK-VNB_growth_beat_expectation_in_1Q23__Profits_and_book_value_increased_under_IFRS_17_6页_1mb

Ping An (2318 HK) Q1 2023 Financial Performance

• VNB growth increased by 8.8% year-on-year, exceeding analyst consensus of low single-digit growth. Excluding assumption changes, growth reached 21.1%, driven by robust new business across all distribution channels.
• Channel reform has enhanced agent productivity, with a 37% year-on-year improvement in agent efficiency and over 130% new business growth in bancassurance.
• Profit and book value improved under IFRS 17 due to changes in accounting standards, including reserve charges moving to other comprehensive income (OCI), optimization of asset-liability matching, and reduced book value volatility.
• For 2023 full year, expect sequential improvement in VNB momentum, lifting forecasts by 5% for FY23E-FY25E. This should refuel contractual service margin (CSM) and support sustainable operating profit and dividend growth.
• Reiterate BUY recommendation based on current valuation, with target price HK$80.30. A and H shares trade at 0.5x P/EV and 0.8x P/BV for FY23E, with a dividend yield of approximately 6%.
• Long-term prospects supported by ongoing channel reforms, expected sequential VNB and profitability improvement, and alignment with dividend policy.
• Net income expectations for FY23E and beyond show positive trends, with ROE improving to 15.4%. Valuation metrics indicate undervaluation compared to historical averages.