Ping An of China (601318) 2019 Interim Report: Core Indicators Overall Exceeded Expectations Continued Growth in Technology Investment

Investment highlights: Ping An Interim reported overall higher-than-expected results and operating profit (YOY + 23.

8%) and EV (earlier +11.

0%) have achieved steady growth.

Increase in NBV margin and agent productivity drive steady growth of life insurance business NBV (YOY + 4.


Ping An continued to increase its investment in the science and technology sector, and the long-term results of the strategic layout of “technology-enabled finance, technology-enabled ecology, and ecological-enabled finance” are expected.

Mainly considering the favorable fiscal policy, we raised Ping An’s EPS for 2019-2021 to 9.

04, 10.

88, 12.

96 yuan, an increase of 54% / 20% / 19% year-on-year, the current PEV in 2019 is 1.

3x, “Buy” rating!

The overall core indicators of Ping An Intermediate exceeded expectations.

Group EV grew 11 earlier.

0%, ROEV is 11.

2%; NBV is increasing by 4 per year.

7%, the second quarter quarter growth of 3.


Net profit attributable to mothers increases by 68 each year.

1%, Q2 single-quarter growth of 61.

0%; operating profit increased by 23 in ten years.

8% in the second quarter quarter increased by 26.

4%, overall slightly higher than expected.

1) The Group’s operating profit grew steadily, mainly driven by the high growth of the insurance business.

Excluding factors such as restructuring returns of $ 10.5 billion in 2018 and excess investment income, Ping An Group’s attributable operating profit (73.5 billion) increased by 23.


Among them, the operating profit of life insurance, property insurance, banks, trusts, securities, other asset management, and technology sectors cashed + 37%, + 69%, + 15%, + 11%, + 31%, -34%, -33%.

2) The value of life insurance business grew steadily, driven by NBV margin and production capacity enhancement.

Life insurance EV increased earlier.

3%; life insurance ROEV 14.

2%, a decline of 3 per year.

4 points, mainly due to the increase in NBV growth and the decrease in contribution from operating deviations.

The proportion of “new business value creation” in H1 2019 is 8.

1%, accumulating nearly 2pct in one year; “operating experience difference” accounts for 1.

4%, down by 1 every year.

7pct, which is expected to be caused by the decline in policy continuity.

In the first half of the year, 90-month policies continued to be implanted.

6%, the ten-year average of 3.

7pct, we expect to be an extraordinary replacement due to the increase in business pressure in the previous year, which may improve in the future. Life insurance operating profit increases by 36 per year.

1% (including the positive reductions in 2019), but operating profit before tax increased by 14.

8%, slightly lower than expected, stemming from a 41% increase in interest income each year.

9%, mainly due to the company’s response to the capital market fluctuations in 2018, maintaining the long-term interest payment competition of dividend universal products, increasing the reserve requirements of dividend universal products, the impact continues into 2019.

The remaining marginal surplus increased by 22.

2%, but the “residual marginal scale contributed by new business” continued to drop by 5.

6% with NBV moving direction (+4.

7%) the opposite.

The reason for the divergence is that the increase in capital costs is reduced by 2.2 billion (the more insurance products sold, the less capital occupation), which has a positive contribution to the growth of NBV, but the “residual margin of new business contribution” does not consider capital costs.

NBV before reducing capital costs is out of range 0.

95%, the change trend is consistent with the remaining marginal change trend contributed by new business.

Life insurance NBV is growing by 4 per year.

7%, the second quarter quarter growth of 3.

2%, due to NBV profit margin improvement.

In the first half of the first year, the premiums were extended twice.

6%, the guarantee rate of new business value increased by 5 in advance.

7 points.

Among them, the agent channel NBV grows by 2 every year.

5%, mainly due to the increase in productivity per agent.

Agent 128 at the end of June.

60,000, a decrease of 9 from the beginning of the year.

3%, the per capita NBV increased by more than 8.


3) The operating profit of the property insurance business increased by 69 per year.

5%, the decline in fee rates and tax cuts in 2019 are the main contributions.

In the first half of the year, the program fee expenditure decreased by 26.

2%, yield is 41 from the same 杭州桑拿 period last year.

0% dropped to 6.


The comprehensive cost rate is 96.

6%, increasing by 0 every year.

8pct, which increases the payout rate by 1.

With 8 points, we judge that there will be a turning point in the second half (increased premium formation rate).

Risk reminder: Agent growth does not meet expectations; Guaranteed product sales do not meet expectations; Technology empowerment effects do not meet expectations