Zhitong Finance and Economics learned that on March 6, Ping An of China (02318) issued an announcement on promoting "improving quality and efficiency and emphasizing returns" and the 2023 annual cash dividend plan", saying that the company adheres to a stable and sustainable cash dividend policy, firmly establishes the awareness of rewarding shareholders, and expects that the total cash dividend in 2023 will account for no less than 40% of the net profit attributable to the parent company, and is expected to maintain the level of cash dividends in 2014.
As a global leader in comprehensive finance, Ping An has always attached great importance to a reasonable return on investment for investors, paying dividends once every six months, and from 2012 to mid-2023, it has paid dividends 24 times, and the dividend level has continued to increase for 11 consecutive years, with a total dividend of more than 280 billion yuan. In the past three years, the company's dividend payout ratio has been 20-30%, and this time it has been raised to no less than 40%, and the dividend return level may nearly double.
Investors invest in listed companies mainly to obtain dividend returns and market value returns, and doubling dividend returns means a significant increase in the risk-free yield, which is 786%, if the dividend return is doubled, the dividend yield will exceed 15%, which is not too fragrant for the market. The increase in risk-free returns will also drive the risk-return premium, resulting in a double double of high dividend yield and market capitalization premium.
Ping An's fundamentals are stable, and under the integrated finance + healthcare strategy, the three businesses of life and health insurance, property insurance and banking business are deeply integrated and synergistically developed, and the premium income of its core business life and health insurance and property insurance will maintain a growth trend in 2023, of which the premium scale of life insurance and health insurance will be 4985300 million yuan, accounting for more than 60% of the total premium, a year-on-year increase of medium to high single digits. Life and health insurance were the company's main results**, and its contribution to profit continued to increase, contributing 733%, which is expected to maintain the level of contribution throughout the year.
This is mainly due to the company's implementation of life insurance reform, with the strategy of "4 channels + 3 products", with the three core services of medical health, home care and high-end elderly care, to build differentiated competitive advantages, and the value of new business has increased significantly, reaching 335 in the first three quarters of 20237.4 billion yuan, a year-on-year increase of 409%, which is more than the whole of 2022. According to the disclosure, the premium income of new life insurance and health insurance business (individual) in 2023 will be 12842.7 billion yuan, a year-on-year increase of 2426%, accounting for 2576%。
New business is a leading indicator of life insurance profits, and the growth rate exceeds market expectations, but it takes time for the value and profit transmission of new business to be realized, and subsequent profits will be gradually realized.
"Insurance + services" is the core that drives the continuous growth of Ping An's new life and health insurance business, and the company has built a medical and health ecosystem with integrated finance as the basic market and medical and health as the new growth engine, under which insurance + services can better meet the multiple needs of users, especially in the field of health and pension. According to the data, as of September 2023, nearly 64% of customers have also used the services provided by the healthcare ecosystem.
Of course, in addition to life insurance and health insurance, the company's other two major businesses also performed steadily, which is also the company's confidence to implement a significant increase in dividends. With the continuous release of the results of life insurance reform and the steady improvement of profits from other businesses, the company's overall profit level will maintain a growth trend. With this increase in the dividend ratio, the profit growth in the next two years will bring considerable returns to shareholders or investors.
It is worth noting that the PB value of Ping An Hong Kong stocks of China is 06 times, PE is 7 times, and the two indicators of the Hong Kong stock insurance sector are 09 times and 11 times, in addition to the company's AH share valuation premium of 2233%。In contrast, the company's valuation is low, and the dividend yield is expected to increase under the increase in dividends, or it is favored by stable and value investors, which will drive the market value to increase and the value ratio is high.