GF SECURITIES·2024-04-24 05:32Investment Rating - The report maintains a "Buy" rating for both A and H shares of the company, with a current price of CNY 39.89 and HKD 33.00, and a fair value of CNY 56.5 and HKD 52.6 [5][19]. Core Insights - The company reported a net profit of CNY 367.1 billion for the first quarter, a year-on-year decrease of 4.3%, but a significant improvement compared to the previous quarter. The core business net profit remained stable, exceeding market expectations [3][17]. - The new business value (NBV) reached CNY 128.9 billion, reflecting a year-on-year growth of 20.7%, driven by improved value rates and product structure adjustments [3][9]. - The agent scale has stabilized, with a slight decrease of 4% to 333,000 agents, while productivity per agent increased significantly by 56.4% year-on-year [3][9]. Summary by Sections 1. Life Insurance Liabilities - The improvement in value rates, driven by product structure adjustments and the impact of policy changes, led to a double-digit growth in new business value. The NBV for the first quarter was CNY 128.9 billion, up 20.7% year-on-year [3][9]. - The first-year premium for new business was CNY 566.3 billion, down 13.6% year-on-year, influenced by high base effects and policy changes [11][13]. - The new business value margin (NBVM) was 22.8%, an increase of 6.5 percentage points year-on-year, attributed to product structure and reduced commissions in the bancassurance channel [13][19]. 2. Property and Casualty Insurance - The company's original premium income for the first quarter was CNY 790.8 billion, a year-on-year increase of 2.8%. The growth rates for auto, non-auto, and health insurance were 3.5%, -9.7%, and 34.1%, respectively [15][20]. - The combined ratio for the first quarter was 99.6%, an increase of 0.9 percentage points year-on-year, primarily due to increased claims from natural disasters and higher accident rates as travel resumed [15][20]. 3. Profitability - The company's net profit for the first quarter was CNY 367.1 billion, down 4.3% year-on-year but better than market expectations. The operating profit after tax (OPAT) decreased by 3% year-on-year, with life insurance OPAT increasing by 2.2% [3][17][19]. - The report forecasts EPS for 2024-2026 to be CNY 5.1, CNY 5.8, and CNY 6.4 per share, respectively, with a fair value of CNY 56.5 per share for A shares [19].