The People's Insurance Co (Group) of China Ltd Class H 01339

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HKD 2.63 +0.05 (1.94%)

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As of May 3, 2024 8:08am Delayed Price Closed

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Company Report

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China Insurance Earnings: New China Life, PICC P&C, and PICC Group Post Weaker Growth

Iris Tan May 1, 2024

New China Life, PICC Group, and PICC P&C reported larger-than-peer contractions in first-quarter net profits of 29%, 24%, and 38% year on year, respectively. This was partly due to the high base a year ago as a result of strong investment income for NCI and a record-low combined ratio for PICC P&C. We believe the results are largely in line to achieve our 2024 net profit growth of 19%, 22%, and 20% for PICC P&C, PICC Group, and NCI.

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Price vs Fair Value

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01339 is trading at a 39% discount.

Price

HKD 2.63

May 3, 2024

Fair Value

HKD 2.40

Mar 27, 2024

Uncertainty

High

1-Star Price: HKD 2.96
5-Star Price: HKD 8.67
Economic Moat: Ctcbc
Capital Allocation: Tffltdtl

Bulls Say, Bears Say

Bulls

PICC P&C's large customer base and long operating history should give it superior insight into risk and pricing. Its diverse product range and widespread geographic reach provide attractive diversification of underwriting risk across its product portfolio.

Bears

PICC Group has relatively high exposure to online sales of health insurance product offerings on third-party internet platforms, which might be negatively impacted by ongoing regulatory tightening.

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Trading Information

Previous Close Price: HKD 2.58
Day Range: HKD 2.61–2.67
52-Week Range: HKD 2.24–3.36
Bid/Ask: HKD 2.62 / HKD 2.63
Market Cap: HKD 116.31 Bil
Volume/Avg: 23.0 Mil / 30.2 Mil

Key Statistics

Price/Earnings (Normalized): 5.11
Price/Sales: 0.21
Dividend Yield (Trailing): 6.92%
Dividend Yield (Forward): 6.92%
Total Yield: 6.92%

Company Profile

With headquarters in Beijing, PICC Group is the largest state-owned insurance group, holding a 69% stake in PICC P&C, an 80% stake in PICC Life, and a 69% stake in PICC Health Insurance. Its P&C subsidiary is the largest nonlife insurer with about one third of market share in China. Life and health insurance subsidiaries hold about 2.9% and 1.3% share, respectively. The Ministry of Finance is the largest shareholder, with 61% share. China's Social Security Fund is the group's second-largest shareholder holding nearly 13% share.

Sector: Financial Services
Industry: Insurance - Property & Casualty
Stock Style Box: Large Value
Total Number of Employees: 175,881
Website: http://www.picc.com.cn

Competitors

Valuation

Metric	01339	601318	601628
Price/Earnings (Normalized)	5.11	8.84	39.82
Price/Book Value	0.43	0.83	1.80
Price/Sales	0.21	0.94	1.48
Price/Cash Flow	—	3.32	2.16

Price/Earnings

01339

601318

601628

Financial Strength

Metric	01339	601318	601628
Quick Ratio	—	—	—
Current Ratio	—	—	—
Interest Coverage	8.63	1.00	—

Quick Ratio

No chart available

Profitability

Metric	01339	601318	601628
Return on Assets (Normalized)	1.79%	0.94%	0.96%
Return on Equity (Normalized)	11.31%	11.99%	12.05%
Return on Invested Capital (Normalized)	6.74%	7.89%	5.38%

Return on Assets