#财经知识科普#
Investment points: In August, the average daily share-based trading volume fell year-on-year, and the balance of the two financing facilities remained high. The rules of the comprehensive registration system were promulgated and implemented, various reforms of the capital market continued to advance, and the top securities firms had significant advantages. Since 2023, the liability side of the insurance industry has continued to improve significantly, and it is optimistic about the development of the health care industry in the medium and long term; Ten-year Treasury yields have declined, and if subsequent economic expectations improve and long-end interest rates rise, the pressure on the investment side of insurance companies will be significantly eased.
Recent performance of non-banking finance sub-sectors: In the last five trading days (August 21-August 25, 2023), the insurance industry outperformed the CSI 300 Index, while the securities industry and diversified financial industries underperformed the CSI 300 Index. The insurance sector fell by 1.79%, the securities industry by 2.39%, the diversified financial sector by 4.56%, the non-banking financial sector as a whole by 2.31%, and the CSI 300 Index by 1.98%.
Securities: Market activity declined in August 2023, and a number of policies were introduced to activate the capital market and boost investor confidence. 1) In August 2023, the transaction volume decreased year-on-year and month-on-month. As of August 25, 2023, the average daily share-based trading volume in August was 883 billion yuan, down 21.6% year-on-year and 4.7% month-on-month.
As of August 24, 2023, the balance of the two financing facilities was 1,567.9 billion yuan, down 4.3% year-on-year and up 1.8% from the beginning of the year.
2) A number of policies to activate the capital market and boost investor confidence have been introduced. The policies mainly include: stamp duty will be halved, IPO and refinancing will be tightened in stages, shareholders will be regulated to reduce their holdings, and the minimum proportion of financing margin will be reduced from 100% to 80%.
3) The China Securities Regulatory Commission held a symposium for institutional investors to guide more medium and long-term funds into the market. The meeting believed that it is timely to develop equity investment in medium and long-term funds such as pensions, insurance funds and bank wealth management funds. Institutional investors should continuously strengthen investment and research capacity building and establish a sound investment management system; Promote the establishment of a long-term assessment mechanism of more than three years, and focus on increasing the scale and proportion of equity investment. The CSRC will coordinate with various departments to provide more powerful support and guarantee for medium- and long-term funds to participate in the capital market, and promote the benign interaction between the capital market and medium- and long-term funds.
4) 22 listed securities companies released their 2023 interim results, and the overall decline in the second quarter was a single quarter. The net profit of 22 listed securities companies increased by 28% in the first half of the year, and fell by 18% in the second quarter. We believe that the main reason for the decline in net profit in a single quarter is that the decline in major equity indexes in the second quarter dragged down the proprietary business of brokers, and the base in the second quarter of 2022 was high (2023Q2 Wande Quan A-3.20%, 2022Q2 +5.10%); In addition, a decline in the equity market may also increase the provision for credit impairment of brokers.
5) The average valuation of the brokerage industry (excluding Oriental Wealth) on August 25, 2023 is 1.3x2023E P/B, and it is recommended to fully benefit from the low valuation and high-quality leaders of the active capital market policy.
Insurance: The debt side continues to improve. 1) The State Administration of Financial Regulatory Authority disclosed the data of the main regulatory indicators of the banking and insurance industry in the second quarter of 2023. At the end of the second quarter of 2023, the total assets of insurance companies were 29.2 trillion yuan, an increase of 7.6% from the beginning of the year. In the first half of 2023, the original insurance premium income of insurance companies was 3.2 trillion yuan, a year-on-year increase of 12.5%.
Provide risk protection amount of 6930 trillion yuan. Indemnity and payment expenses amounted to RMB915.1 billion, a year-on-year increase of 17.8%.
The number of new policies was 33.7 billion, a year-on-year increase of 39.4%. 2) Chinese Life disclosed the first semi-annual report of the insurance company, although the investment side was under pressure, but the net assets, new policy premiums, new business value, and per capita production capacity of agents all increased significantly. Net profit attributable to the parent under the new standard of Chinese Life was 36.2 billion yuan, -8% year-on-year; Q2 Quarter-8.8 billion yuan, -63% year-on-year; Net assets +30.6% from the beginning of the year. NBV in the first half of the year was 30.9 billion yuan, +19.9% year-on-year.
The quality of the sales force continued to improve, with the monthly per capita first-year premium remaining +52% in 2022, and H1 continuing to increase by 38% year-on-year. 3) Listed insurers disclosed their July premium income, life insurance premiums continued to grow at a high rate, and property insurance business slowed down. Listed life insurers' monthly premiums in July were +22.3% year-on-year, and we believe that the high growth of new premiums in July was mainly due to the hot selling window before the scheduled interest rate was about to be lowered and the old products were discontinued.
It is expected that the growth rate of premiums will slow down after switching between old and new products. Listed property insurance companies' monthly premiums in July +0.2% year-on-year; Among them, the growth rate of PICC auto insurance slowed down, and the growth rate of non-auto insurance turned from positive to negative. 4) The insurance industry has a significant pro-cyclical nature, the performance of the liability side has improved significantly since 2023, although the long-end interest rate has declined, but with the economic recovery in the future, the pressure on the investment side will also be significantly eased. On August 25, 2023, the insurance sector was valued at 0.46-0.81 times 2023E P/EV, which is still at a historical low and maintains the "outperform" rating.
Diversified Finance: 1) Trust: The scale of trust assets in the first quarter of 2023 was 21 trillion yuan, +5.23% year-on-year; In 2023Q1, the operating income in a single quarter was 28 billion yuan, a year-on-year increase of 36.39%, 69.3% compared with the fourth quarter of 2022, and the total profit was 21.7 billion yuan, +75% year-on-year, turning a loss into a profit compared with the fourth quarter of 2022. 2) Futures: In July 2023, the trading volume of the national futures trading market was 820 million lots, with a turnover of 51 trillion yuan, +19.9% and +0.2% year-on-year, respectively. In June 2023, the net profit of national futures companies was 1.26 billion yuan, a year-on-year decrease of 20.9%.
Industry ranking and key company recommendation: The industry recommendation ranking is insurance> securities > other diversified finance.
Risk warning: The market downturn has led to a decline in both performance and valuation.