CPIC (601601): New order growth under pressure to improve investment efficiency
This report reads: The company’s new life insurance individual insurance orders in the first three quarters continued to grow negatively, in line with market expectations, and gradually adopted capacity enhancement programs to focus on expanding its core agency team and achieving a smooth transition.
The asset allocation efficiency at the investment end improved, and the performance in the third quarter was better than expected.
Investment Highlights: Maintain “Overweight” rating and maintain target price at 48.
83 yuan, corresponding to a P / EV of 1 in 2019.
14 times: The company’s debt-side performance in the first half of the year was in line with expectations, and the investment-side performance exceeded expectations.
The efficiency of asset allocation has improved, and the return on investment is expected to increase steadily.
Maintain CPIC’s net profit forecast for mothers in 2019-2021 to 283.
50,000 yuan, 330.
44 ppm and 400.
97 million, corresponding to EPS forecast for 2019-2021 is 3.
13 yuan, 3.
65 yuan and 4.
42 yuan, maintaining a target price of 48.
83 yuan, maintain “overweight” rating.
The growth rate of new orders for debt-side life insurance was relatively pressured, and the agency team transformed and developed: the company’s new order business in individual insurance channels declined in the first three quarters.
3%, mid-term new single-year annual decline of 18.
6%, in line with market expectations of the company’s agent channel during the transition period of new orders under pressure.
In the next three years, the company plans to increase the core manpower in the agent channel, increase the proportion of core manpower from 25% to 40%, increase the number of top performers from 600 to over 2,000, and rejuvenate the agent team.The proportion of new generation teams has increased from 15% to 30%.
We believe that the above breakthroughs are expected to significantly improve the productivity of the company’s agent team and realize the transformation of the company’s liability end from “high-speed development” to “gradual development”.
The return on investment has increased, and the efficiency of asset allocation has further improved: the company’s annualized total return on investment in the first three quarters was 5.
1%, compared to 4 in the first half.
8% month-on-month increase of 0.
3%, annualized return on investment net 4.
8%, compared to 4 in the first half.
6% increased by 0.
2%, both better than market expectations.
In the first three quarters, the allocation of cash and its equivalents decreased by 1%, and the allocation ratio of equity investment assets increased by 2% (among which, the allocation ratio of stocks increased).
9%), rose to 14.
5%, indicating that the company is more active in asset allocation, which is conducive to 杭州夜网 coping with potential downward changes in interest rates.
Due to the steady improvement of investment income, the company’s net profit attributable to its mother increased by 80 in the first three quarters.
2% (At the same time, changes in accounting estimates increase the provision of reserves and reduce pre-tax profit 37.
4.2 billion), and long-term profits are expected to maintain rapid growth.
Catalysts: Increased agent productivity is effective, new order growth rate is improved. Risk reminder: capital market fluctuations; the impact of falling interest rates on investment returns