Xinhua Insurance (601336) 2018 Annual Report Comment: Steady Growth in Profits and Values to Improve

Xinhua Insurance (601336) 2018 Annual Report Comment: Steady Growth in Profits and Values to Improve

Event Xinhua Insurance released its 2018 annual report. Xinhua Insurance announced its 2018 annual results, and the company gradually realized premium income of 1222.

86 trillion, ten years +11.

9%, net profit attributed to mother 79.

22 trillion, +47 a year.

2%, the remaining margin is 1956.

37 trillion, ten years +14.

8%; new business value 122.

1 megabyte, the highest growth rate turned to 1.

2%, with an embedded value of 1731.

5.1 billion, a stable growth of +12 for ten years.


Net investment income income 5.

0%, total investment income return 4.

6%, respectively decreased by 0.

1pt / 0.


The average average return is 2.

54 yuan (January 2017.

73 yuan), to achieve an embedded value of 55.

A brief comment of 5 yuan on the stable release of profits, and the reserve fund accrues to the net profit of return to mother in 201879.

22 ppm, with a ten-year increase of 47.

2%, mainly due to the changes in the assumption of the traditional insurance reserve discount rate. The 750-day moving average Treasury bond yield curve is in the upward range in 2018, which is 8bps higher than the morning line, resulting in less reserves.The 750-day curve is down, and the company ‘s profit base is relatively speaking, which results in a relatively considerable profit growth rate in 2018. However, it still has a certain gap compared with the 80% profit growth expectation in the first half of the year, mainly because the company adjusted its actuarial assumptionChanges in accounting estimates have increased life insurance and long-term health insurance liability reserves by 18 respectively.

95, 31.

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

3.8 billion; the assumed adjustment scale makes the provision of insurance liability reserves more lengthy, can adjust the rhythm of profit release, and provide a low base for profit growth in 2019.

Assume that the 10-year Treasury yield remains at 3.

14%, the 750-day moving average yield will still move up in 2019, and it will only decrease slightly in the fourth quarter. Based on the above, we expect the company’s profit in 2019 to maintain high growth.

The company’s remaining margin in 2018 is 1956.

37 trillion, ten years +14.

8%, stable earnings growth.

The growth rate of NBV has improved, and the value growth can be expected. The company can increase the development speed of guaranteed business, making the growth rate of NBV far better than the growth rate of new single premiums.

In the first year of 2018, long-term insurance premiums have fallen by 27.

3%, the decline was much narrower than in the early and early stages, and the growth rate 佛山桑拿网 of new business value improved quarter by quarter, which was 122.

100 million, the annual growth rate is positive to 1.

2%, in line with market expectations.

Benefiting from the development of protection services such as health insurance, the company’s new business value ratio was 39.

7% excellence improvement 8.
2pt to 47.
9%, business quality has been strengthened.

The company’s embedded value reached 1731 in 2018.

51 ppm, an increase of 12 in ten years.

8%, the main contribution comes from the new business value and the expected value of embedded value, contributing 8%, 9 respectively.

2%, the investment return is less than expected, and has a negative impact on the embedded value3.

8%, the impact is small. In 2019, the long-term government bond interest rate will be stabilized, and the equity market will pick up.

The return on investment fell in line with expectations, and the expectation in 2019 improved to the end of 2018, and the company’s total investment assets amounted to USD 6,998 billion, which increased slightly.

At 7%, the allocation of large-scale asset allocations was stable and slightly optimized with changes in market conditions, with debt-based financial assets accounting for 65.

7%, down 1.

6pt, the proportion of equity assets contracted to 16.

6%, down 2.

5pt, non-standard assets accounted for 32.

3%, down 2.

7pt, mainly configured real estate investment plans and collective funds trust plans, the gap increases the overall rate of return.

However, due to the downturn in the stock and bond market, the expected return on investment has still declined internally. The company’s net investment yield and total investment yield are 5% and 4 respectively.

6%, a decrease of 0 compared to 2017.

1pt, 0.

It is expected that the decline in yields in 2019 will not continue. At present, the 10-year treasury bond yields have stabilized indicators. Although there is still downside risk, the proportion of corporate security products has increased, the dead balance, and the fee difference have contributed to the embedded value.As the percentage increases, the sensitivity of internal value to interest rates gradually decreases, and the impact is expected to be limited, and the slow bull market will continue to benefit equity asset investment to improve the total investment income level.

Investment suggestion: The company develops guaranteed products to promote the maximum value of new business and improve the growth rate of new unit premiums. The value improvement effect is obvious; the embedded value grows steadily, and the profits have room to release.High performance growth; Optimized asset allocation on the investment side and improved yield; We conservatively estimate that the embedded value of the company in 2019 will reach 204.1 billion U.S. dollars, a growth rate of 13% and an embedded value of 65.

4 yuan, the current P / EV is 0.

8 times, we think a reasonable estimate is 1 times, and the target price is 65.

4 yuan, give “buy” rating.

Risk warning: premium growth is slower than expected, downside risks to government bond rates