Jinwu Financial News | According to CMB International Development Research Report, China Taibao (02601)'s new business value (VNB) in the first quarter was +30.7% year-on-year to 5.19 billion yuan. The growth rate was better than that of peers such as China Life Insurance +26.3% /Ping An +20.7%.
Looking forward to the future, the bank expects that on the basis of a high banking insurance base, the company may shift its underwriting focus more to agent channels; with the deepening of the Changhang Phase II transformation project, it is expected that future growth in new business value will be mainly driven by an increase in the value rate of the new business. In terms of financial insurance, the comprehensive cost rate in the first quarter was 0.4 percentage points year-on-year to 98%. The premium growth rate was mainly driven by non-car premiums, +13.8% year-on-year, better than the 1Q24 industry's +7.1% year-on-year growth rate of non-car premiums.
The bank believes that the market's focus on the investment side will still be the main focus of the insurance sector in the first half of the year. The company's current stock price is trading at 0.3 times FY24EP/EV and 0.6 times FY24EP/BV. Based on the impact of the new included value assumption on changes in the sensitivity of life insurance's included value and new business value, the bank adjusted the company's target price to HK$24.8 (previously HK$29.72), corresponding 0.4 times FY24P/EV and 0.84 times P/BV using a segmented valuation method. The bank is optimistic about the company's profit resilience, reaffirms the “buy” rating, and includes the company as the preferred target in the sector.