Business & Investment

Decided to lower premium growth forecast for 2009 –

Ping-An: we have Decided to lower premium growth forecast for FY2009

We have decided to modestly lower our premium growth forecast for fiscal 2009. In addition, the life insurance division of Heian completed the reform design of the agency last year.

They piloted in nine states (covering about 10% of agents), thereby completing the design of four separate modules, and now all of these nine states (about 40% of agents). I am confident that it will be deployed in stores. Next, we will deploy pilots nationwide using the base case timeline at the end of this year and the worst case timeline in the middle of next year. For this pilot, the agents who participated in this pilot were about 20-30% more productive than the control group.

Therefore, in our view, the benefits of this reform will be fully felt next year once the rollout is complete. Regarding the agent’s growth plan, it announced that it is aiming for 1 million people in 3 years (1.02 million people at the end of 2020) in the financial results for 2020, but emphasizes that it is 3 years. The number of targets and agents remains basically at a stable level (that is, there can be quarters that can exceed one million and quarters that can fall below one million).

Changes in forecasts EPS forecasts for FY21-23 have been lowered due to lower premium income and lower investment income estimates (Figure 7). It also lowered the FY21F-23F NBV forecast by 5%, reflecting lower assumptions about premium growth. Embedded Value (EV) estimates for the 21F-23F year are down 1-2% due to low NBV estimates and weak investment return estimates.

Currently, the NBV growth rate for FY2009 is forecast to be 12.7% (previously 18.3%). Ping An’s public guidance emphasizes that it is aimed at the positive growth of NBV in 2009. Note that unlike some of the peers listed, Ping An no longer rewrites past NBVs when changing actuarial assumptions.As a result, changes to actuarial assumptions announced in FY2008 results (costs and

Valuation and Risk Reduced SOP-based TP from HK $ 131 to HK $ 125 to bring the listed entity components of SOP valuation to market, especially for banking and fintech / health tech operations, life insurance valuation Take into account the reduced estimate of. For NBV, EV and net profit. The SOP valuation evaluates the number of listed companies based on the current stock price. Therefore, we marked the SOP valuation to mark the current stock price of Ping An Bank (000001 CH, 73% 74% 0 points effective tax rate 15% 15% 0 points 14% 15% 0 points 14% 15% 0 points. Dividend payment ratio 27% 27% 0 points 27% 27% 0 points 28% 28% 0 points EPS growth rate 17% 14% -3 points 17% 17% 1 point 15% 16% 1 point BVPS growth rate 10% 9% -1 point 10% 9% 0 point 10% 10% 0 point FY21F FY22F FY23F Insurance – Life │ Hong Kong Ping An Insurance │ April 20, 2021 7

PingAn’s life and health insurance segment uses a weighted average P / EV and P / BV Gordon growth model (33% weighting for P / EV GGM, 67% weighting for P / BV GGM) Evaluate. Damage (P & C) insurance department using P / BV GGM. Trust, securities and wealth management departments are also valued using P / BVGGM.

Since Ping An Bank is listed on the Shenzhen Stock Exchange, banking operations are valued at market value. Units already listed within the FinTech and Healthtech businesses (ie Good Doctor (1833 HK, unevaluated), OneConnect (OCFT US, unevaluated), Lufax (LU US, unevaluated), and Autohome (ATHM). US, unevaluated)))) are valued at current market value, pre-list capitalized units (HealthKonnect) are valued at the latest post-money valuation, and the remaining technology units of Ping An Group are peer technology companies P. Will be evaluated using. / A multiple of BV.

Our peer technology companies, P / BV multiples, are derived from the simple average P / BV multiples of four technology companies, including health tech, fintech, internet and online vertical markets. In each of these four groups, we get the weighted average P / BV multiple of the selection of selected companies around the world.

In addition, taking into account the fact that Ping An is valuing the remaining unlisted technology businesses, applying a 40% valuation discount to multiples of these, i) the opacity of these remaining technology businesses, and ii) Due to the relatively low liquidity of these businesses, it is extremely difficult to sell at a price close to the valuation ratio of listed companies.

Our key evaluation assumptions can be seen in Figures 1 and 2. 10 and 11. The target price is derived by applying a multiple of the target valuation to the embedded value per share (EVPS) and book value per share (BVPS) of FY21F (unchanged). The RMB / Hong Kong dollar exchange rate assumption is 1.19 (formerly 1.21). Changes in NBV and EV estimates will reduce life insurance valuations by 5%, bank valuations by 7%, and fintech and health tech valuations by 7%.

Decided to lower premium growth forecast for 2009 – Decided to lower premium growth forecast for 2009 –

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