Comments on Xinhua Insurance (601336) Annual General Meeting of Shareholders: Mergers and Gradually Decide to Focus on Possible Adjustment Directions of the Company’s Business Strategy in the Future

Comments on Xinhua Insurance (601336) Annual General Meeting of Shareholders: Mergers and Gradually Decide to Focus on Possible Adjustment Directions of the Company’s Business Strategy in the Future

Core Opinion Event On June 27, it was announced that it had agreed to the appointment of Mr. Li Quan as the company’s chief executive officer and president through the “About the Appointment of the Chief Executive Officer and the President of the Company.”

From the date when the board of directors formulated the resolution to the time when Mr. Li Quan was approved by the Banking and Insurance Regulatory Commission, the board of directors agreed to appoint Mr. Li Quan as the temporary director of the company to preside over the company’s daily operation and management.

At the same time, Mr. Yang Zheng no longer acts as the company’s chief executive officer and chairman of the executive committee.

The company re-elected the board of directors, elected the seventh session of the board of directors, independent directors, the director of the Central Huijin Integrated Management Department / Bank Two Department and the managing director Liu Haoling officially entered the board of directors through elections.

However, the post of chairman needs to be elected after the seventh board of directors is formally established.

Investment Points 1.

The past transition performance is remarkable, and the scale has improved. The most important change since Xinhua Insurance’s transition is reflected in the transformation of its business structure, the transformation of its premium structure, and the enhancement of value.

At the beginning of 2014, Wan Feng took charge of Xinhua Insurance, and began a painful journey of transformation.

The two years of 2016 and 2017 are also major reductions in the size of premiums paid by bancassurance channels and efforts to transform the business structure. The difference in compression fees has eroded company profits.

The growth rate of insurance premiums paid in 2018 was higher than the industry’s performance, of which the renewal premiums accounted for 78% of the total premiums.

4%, an increase of 8 per year.

2%.

In the first quarter of 2019, the company realized a total premium of 431.

69 ppm, an increase of 9 in ten years.

5%.

The premium for the first year of long-term insurance is 60.

7 billion to 71.

63 ppm, an increase of 18%, short-term insurance premium income from 14.

65 ppm rose to 21.

79 trillion, a growth rate of 48.

7%.

New single premium 93.

42 ppm, an increase of 23 in ten years.

98%, renewal premium 338.

2.7 billion, a year-on-year increase of 6%, and premium income growth is good.

The company’s long-term insurance company pays premiums for the first year of 71.

54 ppm, an increase of 18 years.

2%, and one of the insurance channels pays 55 for the first year of long-term insurance.

13 ppm, an increase of 16 in ten years.

3%, the first-year premium payment of long-term insurance through the bancassurance channel16.

410,000 yuan, an increase of 25% in ten years.

Among the contributions of premium income from different channels, premium income from individual insurance channels contributed 344.

75 ppm, a ten-year increase of 9.

8%, of which the new single premium is 66.

60 ppm, a year-over-year growth rate of 21.

93%; premium income from bancassurance channels was 76.

65 ppm, a five-year increase of 5.

2%; premium income from group insurance channels10.29 ppm, an increase of 35 in ten years.

9%.

Looking at the growth rate of premium data in the first five months of 2019, Xinhua Insurance, Ping An Life Insurance, CPIC Life Insurance, China Life Insurance and PICC Life Insurance were 9 respectively.

49%, 8.

69%, 5.

39%, 4.

73% and 1.

82%, the growth rate of listed life insurance companies is 6.

15%.

In terms of market share, Xinhua Insurance is 3.

54%, under pressure.

2.

The proposed new leader is good at investing. It is worth paying attention to whether the previous strategy is adjusted. As mentioned above, the former chairman has undertaken drastic reforms since he took office.

Regarding the development of the company, benevolent sees wisdom and sees wisdom. Judging from the investment background of the current president and CEO nominee Li Quan, he knows both Xinhua Insurance, Kang Dian and Wan Feng, both of which are also very sophisticated.For investment management, it is possible to comprehensively consider the rejection and the investment side, and there may be some changes in the future.

Gong Xingfeng, vice president, chief actuary and secretary 深圳桑拿网 of the board of directors of Xinhua Insurance stated at the shareholders’ meeting that this is also a question of how to achieve a relatively balanced development in the company’s overall strategic layout plan in the next step.

Regarding whether the company’s strategy needs to be adjusted, it needs to start operation after the seventh session of the board of directors chooses to land. It has also received great attention from the market and is one of the core factors that affect future trends.

3.

Estimates and investment advice The company has been transforming into a guaranteed product. We believe that the company’s rejection and value growth are expected to continue to improve.

Under the background that the equity side is generally stable and the company’s debt side is growing, the company’s performance has achieved 厦门夜网 good growth.

From the current point of view, the company’s P / EV is at a relatively low level, and is expected to continue to benefit from the increase in product income and premiums brought by business conversion and high-cash value products, and look forward to achieving further success in the realization of the new session in the future.
We expect the diluted EPS for 2019-2021 to be 3 respectively.

29/3.

89/4.

51 yuan, P / EV is 0.

91/0.

78/0.

66 times, maintain “Recommended” rating for the company.

Risk warning: Sino-US trade friction risk; sharp decline in the stock market; performance is less than expected risk; interest rate risk; macroeconomic downside risk; reorganization change and progress uncertainty risk.