CICC released a research report that maintained China property Insurance (02328) "outperform industry" rating, with a 24e/25e EPS of 1 per share.Topskater. 37/1Topskater. 46 yuan, with a target price of HK $11.8. Company's 1Q24 premium income + 3.8% compared with the same period last yearTopskaterThe comprehensive cost rate (CoR) rose from + 2.2ppt to 97.9% compared with the same period last year, which was lower than expected by the bank and the market, mainly due to the impact of freezing rain disasters. The net profit reached 5.871 billion yuan,-38.3% compared with the same period last year, which was lower than the bank and market expectations, mainly due to the company's higher-than-expected compensation and lower-than-expected investment performance under the impact of the disaster.
The main points of the report are as follows:
Property insurance CoR affected by disasters deteriorated year-on-year, maintaining the guidance for the whole year.
The total premium income of 1Q24 property insurance / auto insurance / non-car insurance is + 3.8% plus 1.9% plus 5.0% for non-car insurance, respectively (compared with the same period of the same period in industry + 5.1% plus 2.6% and 7.1 per cent respectively). Italian Health Insurance / Agricultural Insurance / liability Insurance / Enterprise property Insurance / Credit guarantee Insurance / Freight Insurance / other types of Insurance Premium income year-on-year + 6.2%, 3.2%, 1.3%, 11.3%, 7.6%, 9.4, 5.2% respectively. The company's CoR increased from + 2.2ppt to 97.9% compared with the same period last year, mainly affected by the freezing rain disaster in the first quarter and the increase in the vehicle risk rate under the normalization of the epidemic, which was lower than the bank had expected.
The company said at the results meeting that although the compensation rate of car insurance rose year-on-year due to the disaster, 2.1ppt (catastrophe)TopskaterThe impact is + 1.2ppt), but the expense rate will maintain the underwriting target of about 97% of auto insurance / non-auto insurance for the whole year due to the company's improved operating efficiency and year-on-year decline in 0.6ppt.
Profit performance is not as good as expected, so it is recommended to wait for the opportunity after adjustment.
1Q24's homing net profit was-38.3% year-on-year, much lower than the bank and market expectations, mainly due to (1) higher-than-expected compensation under the influence of disasters, and property insurance underwriting profit (calculated value) decreased by about 48% in the first quarter compared with the same period last year. (2) the lower-than-expected investment performance under the fluctuation of the capital market is mainly due to the decline in equity investment income compared with the same period last year. 1Q24 has an annualized total investment return of 0.8% (lower than that of the life insurance industry that has disclosed its performance). The company said that because the company holds more fair value changes relative to its peers can only directly affect the profit and loss of fund products, while the rate of return of 1Q24 fund products is obviously under pressure compared with the same period last year.
The bank is still optimistic about the company's operating advantages and long-term trend as a property insurance leader, and expects the company's defense attribute and profit trend to be stable or meet the challenge under the fluctuation of profits in the first quarter, superimposing recent changes in market risk appetite. The bank suggests waiting for the opportunity after adjustment.