Xinhua Insurance (601336): Debt end rises in quantity and quality, long-term value growth is expected

Incident Xinhua Insurance released the first quarter report of 2019. The company achieved premium income of 431 in the first quarter.

69 ppm, an increase of 9 in ten years.

5%, the annual growth rate of individual insurance premiums reached 17%; the company realized net profit attributable to mothers33.

67 ppm, an increase of 29 in ten years.

1%; the equity of returning mother shareholders increased earlier.

6% to 731.

950,000 yuan, total assets reached 7676.

460,000 yuan, an increase of 4 earlier.

6%; annualized total investment income injection 4.

2%; basic profit return is 1.

08 yuan / share, an increase of 28 over the same period last year.

6%; Estimated increase in average net asset income by 4.

85%, increasing by 0 every year.

81 units.

The company’s first-quarter performance was basically in line with expectations, and it continues to be optimistic that the value of scale will improve quarter by quarter.

Comment on the rapid increase of new single premiums, and the business structure continues to be optimized. In 2019, “Xinhuameng” Xinhua Insurance implemented a sales strategy of “supporting the main promotion”, replacing it with health insurance, supplementing insurance as an important growth point, and supplementing annuity insurance.The “1 + N” product portfolio model introduced cardio-cerebral-vascular disease additional insurance and market gaps, and differentiated sales strategies using the company’s first quarter premium income growth9.

5% reached 431.

With a growth rate of 6.9 billion U.S. dollars, it reached a new high in the past five years. The first year of long-term insurance premiums increased rapidly to achieve a high growth rate of 17%, which significantly improved the new single premium replacement plan for 2018.

In fact, the company’s business structure has continued to improve. In the first year of long-term insurance, the premium has increased by + 18%, and the scale of insurance premiums has further contracted by 40%.The crossover ratio reached 99.

9%, of which premiums for ten years and over accounted for 47%. Since Xinhua’s transformation, it has insisted on developing long-term premium business, and its business structure is at a relatively high level in the industry.

The transition of major insurance companies has basically entered a stable period. The premium growth rate of one insurance channel has continued to the bancassurance channel. The income from the bancassurance channel has basically been reduced to zero, and the proportion of individual insurance channels has increased to 80%.
The company’s strong development of the health insurance business has enabled the rapid growth of the health insurance business, with a growth rate of 36 in 2018.

2%, accounting for 35% of the total premiums, while promoting the value of new business to 47.

9%, a leading position among listed insurance companies.

We expect that the company’s protection insurance will still maintain a rapid growth of more than 30% in 2019, and promote the new business value to gradually achieve 10% -15% growth.

The solvency is sufficient, and the profit is still released. As of the end of the first quarter, the company’s core solvency can be re-accumulated 274.

31%, the accumulated solvency capacity accumulated 278.

98%, an increase of 4 compared with the same period last year.


With 57 averages, the company adjusted its actuarial assumptions in 2018, increasing the reserves for life insurance and long-term health insurance liabilities by 18, respectively.

95, 31.

4.3 billion, a 50% reduction in pre-tax profit.

3.8 billion, the company withdrew insurance liability reserves 37 in the first quarter.

0.4 billion (-200 million in the first quarter of 2018), a large amount of reserves were made.

In addition, according to the current 10-year government bond yield3.

At the level of 4%, static calculations affect the 750-day moving average yield curve of 10-year Treasury bonds 杭州桑拿网 withdrawn from reserves, which is still in the upward range in 2019, so Xinhua Insurance has a penetrating room for the release of net profit in 2019.

The surrender rate has dropped, and the quality of business has improved.

880,000 yuan, a significant reduction of 79 per year.5%, mainly due to the company’s business transformation, the bancassurance channel of high cash value products for the expansion of insurance expenditures decreased, the withdrawal rate decreased by 2.

5 up to 0.

6%, business quality improved significantly.

Q1 maturity and annuity payments exceed 75.

2%, resulting in a 69% increase in net compensation expenses, but from the perspective of net cash flow from operating activities, net inflows in the first quarter3.

14 yuan / share, better than the same period last year -0.

16 yuan / share level, so there is no impeding pressure on cash flow expenditure.

The return on investment was lower than expected. The best improvement is expected until the end of the first quarter of 2019. The company’s total investment assets are 7,307.

7.3 billion, an increase of 4 from the end of 2018.


Annualized total investment income of the company 4.

2%, compared to 4 in 2018Q1.

3%, and 4 of 2018A.

6%, the return on investment was slightly lower than expected.

After calculation, the company’s annualized net investment income increased by 3.

8%, lower than the same period last year (4.

3%), the recovery of the equity market contributed to the change in fair value gains and losses5.

53 trillion, affecting the increase in the fair value of suspected sale of financial assets42.

20,000 yuan, calculated the company’s comprehensive investment income increased by 4.

9%, higher than in 2018 1.

8 points.

With the increase in the proportion of the company’s security products, the dead balance, and the contribution of the fee difference to the embedded value, the sensitivity of NBV and EV to the return on investment has gradually decreased.

In 2019, with the recovery of the equity market and the reset of the upward trend in interest rates, we expect the company’s performance and investment income to improve.

Investment suggestion The company’s new policy premiums and new business value growth in the first quarter of 2019 are at a relatively high level in the industry. Adequate reserves are provided to allow room for profits to be released. In the second quarter, under the support of a high probability of long-term government bond interest rates, insurance spending will increaseAdjusted support factors can enjoy a reasonable premium, the company’s current P / EV is 0.

9 times, we think the reasonable estimation interval is 1-1.

1x, raise target price to 72.

05 yuan, given a “buy” rating.