According to the research report released by bocom intl, it is expected that the new business value of ping an insurance (02318) in the first half of 2024 will increase by 12% year-on-year, mainly due to the year-on-year increase in new business value rate. It is expected that the new business value in the second quarter will increase by 2% year-on-year, with a slower growth rate than the first quarter due to the high base.
The bank expects the comprehensive cost ratio of the company's property insurance business to be 99.4% in the first half of the year, up 1.4% year-on-year, mainly due to the slowdown in auto insurance growth and the impact of natural disasters; However, it has fallen slightly by 0.2 percentage points compared to the previous quarter, and the drag on the comprehensive cost ratio by credit guarantee insurance has weakened slightly.
The bank expects that the company's net operating profit after tax (OPAT) attributable to owners of the parent company will decline by 3% year-on-year in the first half of the year, of which the life and health insurance and the banking business will remain basically flat year-on-year, the property insurance will decrease by 18% year-on-year, and the asset management and technology businesses will stabilize on a month-on-month basis. It is expected that the net income in the first half of the year will decrease by 2% year-on-year, and the profit growth rate in the second half of the year is expected to rebound. The company will issue USD 3.5 billion of 5-year H-share convertible bonds to lower financing costs and have a limited dilution impact. If fully converted, it is expected to increase the core solvency adequacy ratio by 3 percentage points.
The bank points out that the company's current dividend yield has exceeded 7%, and its valuation is attractive. There is a high level of certainty for the full-year net operating profit to rebound in 2024. The bank maintains a buy rating and a target price of HKD 51.