At the PICC 2021 annual results conference on March 28, Li Zhuyong, vice president of the group, said in response to questions about the stock price that from a valuation perspective, our stock price is undervalued. At present, the corresponding dividend yields of A shares and H shares are 8.0% and 3.7% respectively, which are worthy of long-term holding.
Previously, PICC released its 2021 annual report. Last year, it realized insurance business income of 585.4 billion yuan, a year-on-year increase of 3.9%, and a net profit attributable to the parent of 21.6 billion yuan, a year-on-year increase of 7.8%. For the whole year of 2021, the company will distribute a total dividend of 0.164 yuan per share, a year-on-year increase of 5.1%.
Talking about the stock price: underestimated by the market, the future will be good for a long time
Since the beginning of this year, A-shares have continued to be turbulent, and PICC’s share price has also fallen. Wind data shows that as of the close of March 28, its share price has fallen by 4.04% during the year, and today’s share price rose 1.12% to 4.51 yuan per share.
Li Zhuyong said that from a valuation perspective, the company’s stock price is undervalued.The current dividend yields for A shares and H shares are as follows: 3.7%and 8.0%, it is worth holding for a long time. Investors can share the company’s long-term development results while receiving higher cash dividends.
Li Zhuyong further stated that the company will stabilize and boost the stock price in various ways. The first is to further promote the implementation of the “Excellent Insurance Strategy”, continuously improve the company’s performance, and create sustainable growth value for investors; the second is to continuously improve the return to investors. Since its listing in 2012, the company’s cash dividend per share has always been maintained. Growth will be maintained as much as possible in the future, so that investors can obtain stable dividend income; the third is to vigorously strengthen communication with investors, so that the market can deeply understand the company’s operation and management, business characteristics and competitive advantages. and investment value. “We are confident that the company’s stock price will improve in the long term in the future.”
Talking about auto insurance: this year, the loss rate has been stable and slightly increased, and the expense rate has been stable and slightly decreased.
It is worth mentioning that PICC is the only A-share listed insurance company that focuses on property insurance business. In 2021, PICC P&C under its subsidiary will achieve original insurance premium income of 448.384 billion yuan, a year-on-year increase of 3.8%. The main source of business growth is In the growth of accident and health insurance, agricultural insurance, liability insurance, cargo insurance and other businesses.
However, due to the comprehensive reform of auto insurance and the impact of major disasters such as rainstorms and typhoons, the loss rate of PICC Property Insurance last year was 73.6%, up 7.4 percentage points year-on-year, and the underwriting profit was 1.81 billion yuan, down 56.4% year-on-year.
In 2021, the comprehensive reform of auto insurance will continue to be implemented, and the auto insurance business of property insurance companies will be generally affected. PICC P&C’s auto insurance premium income last year also decreased by 3.9% year-on-year. At the same time, the loss ratio increased by 12.1 percentage points, and the underwriting profit was 66.72%. 100 million yuan, a year-on-year decrease of 24.3%.
Yu Ze, vice president of PICC, said that in the future, the principle of effective development of auto insurance will still be adhered to. The target comprehensive cost ratio is classified and locked, and the linkage of price and fee is strictly implemented to ensure that the price and risk are basically matched, and the annual profit of the policy will be realized; The existing business continued to increase the renewal rate; it strengthened the construction of direct sales channels, removed intermediaries, and improved customer stickiness and loyalty.
In December 2021, the “New Energy Vehicle Demonstration Clause (Trial)” was officially launched. For property insurance companies, the emerging field of new energy vehicle insurance is also a battleground. What does PICC P&C plan to do? Yu Ze said that the company attaches great importance to the strategic development opportunities of new energy vehicles, and started to reserve big data application technology as early as the development of new energy demonstration clauses in the industry. Integration, to achieve accurate identification of vehicle behavior such as the nature of use of new energy customers, and formulate a clearer pricing strategy. Judging from the data currently available, we are confident that the company’s new energy auto insurance business will remain profitable and keep pace with the overall auto insurance business.
Yu Ze further stated that since the new energy vehicle clause was officially launched in December 2021, the new energy vehicle loss rate and expense rate under the new clauses increased. The combined ratio remained stable.
Talking about investment: the value of short-term bottom-building in the medium and long-term has been highlighted
Li Zhuyong also responded to the public concern about the investment in insurance capital rights and interests. In 2021, PICC’s total investment yield will be 5.8%, the same as the previous year.
Li Zhuyong said frankly that since the beginning of 2022, major global capital markets have experienced relatively large fluctuations. The domestic economic development is facing the triple pressure of “shrinking demand, supply shock, and weakening expectations”. In such an internal and external environment, the domestic capital market will inevitably be under greater pressure in the first quarter. “Looking ahead, we believe that the equity market is at a bottoming stage in the short term, but the value of medium and long-term allocations has become prominent.”
Li Zhuyong said that as an insurance investment institution, the company will adhere to the concept of long-term investment, value investment and prudent investment. Within the risk tolerance range, equity investment will focus on the allocation of strategic assets (SAA), and actively increase the allocation ratio when the valuation is relatively low. , and actively carry out rebalancing operations; in terms of specific rights and interests, not only actively grasp the periodic investment opportunities that benefit from the stable growth policy, traditional economy, and industry valuation mean regression, but also focus on consumption upgrades, technological innovation, and healthy pensions. The structural investment opportunities brought about by the rapid growth of emerging strategic industries such as green and low-carbon industries, to build an investment portfolio that is in line with the direction of economic development and through cycles.
The Beijing News Shell Finance reporter Pan Yichun edited Bai Huabing to proofread Jia Ning Return to Sohu, see more
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