PING AN OF CHINA(SH:601318) Soochow Securities·2025-03-20 10:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company reported a net profit attributable to shareholders of 126.6 billion yuan for 2024, representing a year-on-year increase of 47.8%. The fourth quarter alone showed a profit of 7.4 billion yuan, recovering from a loss of 1.9 billion yuan in the same period of 2023 [7][19]. - The operating profit attributable to shareholders was 121.9 billion yuan, with a comparable year-on-year increase of 9.1%. The net asset attributable to shareholders reached 928.6 billion yuan, up 3.3% from the beginning of the year [7][12]. - The company increased its dividend per share to 2.55 yuan, a growth of 5% year-on-year, with a dividend payout ratio based on operating profit of 37.9%, up 0.6 percentage points from 2023 [7][16]. Financial Performance Summary - Total revenue for 2023 was 913.8 billion yuan, projected to grow to 1,028.9 billion yuan in 2024, reflecting a year-on-year increase of 12.6% [1]. - The net profit attributable to shareholders is forecasted to be 135.2 billion yuan in 2025, 154.4 billion yuan in 2026, and 177.0 billion yuan in 2027, indicating a recovery trend after a decline of 22.8% in 2023 [1][36]. - The company's price-to-earnings ratio (P/E) is projected to decrease from 11.49 in 2023 to 7.78 in 2024, suggesting a favorable valuation [36]. Business Segment Performance - The life insurance segment saw a 3.9% increase in new individual business, with significant growth in the margin of new business value (NBV) [7][26]. - The property and casualty insurance segment turned profitable with an operating profit of 5.46 billion yuan, compared to a loss of 2.08 billion yuan in 2023 [7][24]. - The asset management segment reported a loss of 11.9 billion yuan, although the loss narrowed by 43% compared to the previous year [7]. Investment Strategy - The company has adjusted its investment strategy, increasing allocations to bonds and stocks while reducing exposure to funds. The total investment scale reached 5.7 trillion yuan, up 21.4% year-on-year [7][31]. - The net investment yield decreased to 3.8%, while the total investment yield improved to 4.5% [32]. Valuation Metrics - The company's current market capitalization corresponds to a 2025 estimated enterprise value (EV) of 0.65 times, indicating it is still undervalued [7]. - The estimated embedded value (EV) for life insurance is projected to grow by 11.4% year-on-year, while the new business value (NBV) is expected to increase by 28.8% [7][14].