Ping An of China (601318) 2019 Annual Report Comments: Remaining Margin Slows Down, 2020 Operating Profit Growth Or Will Tend

Ping An of China (601318) 2019 Annual Report Comments: Remaining Margin Slows Down, 2020 Operating Profit Growth Or Will Tend

On the evening of February 20, 2020, Ping An announced its results for 2019, with new business valued at 75.9 billion yuan, an increase of 5 in ten years.

1%, attributable to the mother’s operating profit of 133 billion, an increase of 18 year-on-year.

1%, operating ROE21.

7%.

Investment points: The actuarial assumptions adjust the final net profit growth rate expectations, and the life insurance operating profit is slightly higher than expected: the group’s net profit attributable to mothers in 2019 is 149.4 billion, an increase of 39.

1%, compared with 63 in the first three quarters.

A significant increase of 2% and a negative quarterly net profit growth in Q4, mainly due to the adjustment of actuarial assumptions leading to an increase in reserves of 20.8 billion (after-tax impact of approximately 15.6 billion), leading to life and health insurance business profit growth from 101 in the third quarter% Teenagers 合肥夜网 to 77%.

From the perspective of operating profit, the growth rate in ten years was 18.

1%, compared with 21 in the first three quarters.

The 5% has also improved. Initially, the life insurance operating experience has performed worse than expected, and the operating deviation has suddenly dropped by 52%, so the operating profit growth before taxation was only 2.

6%, benefiting from the new tax reduction policy in 2019, operating profit growth of life and health insurance business reached 24.

7%.

The unconventional closing in December boosted the growth of NBV, but under pressure in 2020Q1: long-term new business value was 75.9 billion, a growth rate of 5.

1%, earlier quarter 4.

The 5% improvement is mainly due to the unconventional sprint in the closing phase in December (the growth rate of new orders in a single month was 47.

8%).

However, from the perspective of the team, at the end of December, there were 116 manpower in danger.

70,000, compared with 124 at the end of the third quarter.

50,000 continued gradually, with a decline of 17 in ten years.

7%, due to the business strategy is more supportive, increasing the capacity of agents or it is difficult to overcome the size gap. At the same time, the new crown epidemic has affected the recent business.

At the end of the life insurance period, the embedded value reached 757.5 billion yuan, an increase of 23 per year.

5%, still maintained rapid growth, the remaining marginal balance was 918.4 billion, exceeding the growth of 16.

8%, a growth rate of 27 compared with the previous year.

The 6% increase significantly, and the growth rate of future operating profit will also decline.

The comprehensive cost ratio of property and casualty insurance increased slightly, with tax cuts and investment driving high operating profits: the preliminary comprehensive cost ratio was 96.

4%, although it is increased by 0 every year.

4pct, but still maintain excellent underwriting profitability.

Benefiting from the recovery of the capital market, profit before tax increased by 30%.

At the same time, due to the decline in income growth brought about by the new tax reduction policy, net profit after tax has increased by 85.

8% to 228 billion, even after excluding the one-off tax cut in 2018, operating profit growth has also reached 70.

7%.

Profit forecast and investment advice: Under the assumption of 5% return on investment, the EPS is expected to be 8 in 2020-2022.

48/9.

68/10.

84 yuan, corresponding to PE is 9.

82/8.

61/7.

68 times, EVPS is 76.9/89.

8/104 yuan, corresponding PEV is 1.

08/0.

93/0.

80 times, the current estimate is reasonably low, maintaining the “overweight” level.

Risk factors: New business value growth is slower than expected, equity market plunges, and systemic risk