Jinwu Financial News | According to the BOC International Development Research Report, Xinhua Insurance (01336)'s profit fell 28.6% year on year. The profit decline was higher than that of its peers, mainly due to the high base for the same period last year, the year-on-year decline in investment income, and the year-on-year increase in interest expenses. The premium structure has been significantly optimized, and the share of ten-year term payments has been greatly increased; business quality has been optimized. The value of new business increased 51% year over year in the first quarter, leading the industry in growth rate. The annualized return on total investment was 4.6%, down 0.6 percentage points from the previous year.
According to the bank, the company's transactional financial assets account for 31% of investment assets, accounting for a higher share than peers, and profits are more volatile. Due to the company's net loss in the second half of last year, the bank expects the company's profit to show an upward trend from a low base in subsequent quarters. Based on the new accounting standards, the company's net profit to mother is estimated to be about RMB 10 billion in 2024, an increase of 15.2% over the previous year. The bank maintained a target price of HK$20.5 (corresponding to 0.53 times the net market rate in 2024). Considering the company's current low valuation, the dividend ratio is over 6%. At the same time, as the real estate market stabilizes marginally, the 10-year treasury bond yield is expected to rise at a low level to ease market concerns about interest spreads and losses in the industry. The bank raised the company's rating from neutral to buying.