Maintain the investment rating of "Buy" with target price of HK$62.30, equivalent to 0.67x 2023F P/EV. Shareholders’ OPAT was up 0.3% yoy to RMB148,365 mn and DPS was up 1.7% yoy to RMB2.42, slightly beyond our expectation. Shareholders’ NPAT was down 17.6% yoy to RMB83,774 mn, mainly dragged down by poor investment performance.
　　Life insurance NBV bottomed. NBV was broadly in line with our expectation, down 24.0% yoy. FYP used to calculate NBV was down 12.4% yoy, mainly due to poor demand for insurance products. NBV margin was down 3.7 ppts to 24.1%, due to change in product mix, where FYP of long-term protection products was down 50% yoy. The reform that Ping An advanced has started to bear fruit. The productivity of agents has improved, with NBV per agent up 22.1% yoy. According to the management team, NBV recorded positive growth in Feb 2023, and maintained its momentum in the first half of March.We expect NBV growth to recover to positive in 2023, thanks to recovery of the economy from the Covid pandemic and the improvement of channel quality.
　　P&C’s underwriting profit was dragged down by guarantee insurance.　GWP was up 10.4% yoy, mainly driven by strong growth of non-auto insurance, up 19.1% yoy. Underwriting profit deteriorated in 2022 with COR up 2.3 ppts to 100.3%, mainly dragged by the deterioration of guarantee insurance business, with COR up 40.2 ppts yoy to 131.4% due to decrease in SME repayment ability amid poor economic environment. We expect COR to be under pressure in 2023, especially in 1H23, as it may take time for SMEs to recover.