Jinwu Financial News | According to CMB International Development Research Report, the premium income growth rate of listed life insurance companies declined in 1Q24, but the decline narrowed month by month. Thanks to the continued strong demand for savings insurance from residents under low risk preferences and the improvement in the value ratio of new banking insurance businesses, the bank expects the new business value of listed insurers to continue to grow rapidly in the first quarter. Based on the robustness of the underwriting side business, the bank is optimistic about China Taibao (02601).
The growth rate of financial insurance premium income picked up in March, and the improvement in the pace of underwriting in non-vehicle policy businesses led to growth. The first quarter was affected by freezing rain disasters in some regions, and the industry's payout rate showed an upward trend. The bank expects the comprehensive underwriting cost ratio of listed financial insurance companies to increase slightly in the first quarter.
According to the bank, Chinese life insurance companies currently trade 0.1-0.4 times FY24EP/EV, and sector valuations are mainly limited by asset-side investment performance. Currently, the downside risk of the industry is low and the margin of safety is high; financial insurance companies are trading at 0.2-0.8 times the FY24E net rate, maintaining the sector's “superior to market” rating. It is recommended to buy China Financial Insurance (02328), with a target price of HK$11.9, corresponding to 1.0 times FY24E net market rate.