<Result first take> China Taiping (966 HK, BUY) 1H VNB declined 13% y-o-y and in-line with expectation
- CTIH announced 1H attributable profit of Rmb 2.7bn, a 47% y-o-y decline, in line with market expectation. The drop in earnings was primarily due to the noticeable decline in investment income.
- VNB dropped 13% y-o-y, the weaker performance was due to impact from annuity product mix shift which result in a 4.1ppts drop in VNB margin (at 13.5%).
- Gross written premium (GWP) increased 2.2% to Rmb 160bn, monthly regular premium per agent increased 15% y-o-y, indicating the improving productivity.
- Domestic P&C business GWP grew 3% y-o-y in 1H22 with combined ratio improved 5.3ppts to 98.8%, contributed by the 1.7ppts improvement in expense ratio.
- Total investment yield decreased 2.86 ppts to 3.35%, dragged down by the drop in stock markets, while net investment yield remained stable at 4.05%.
- Comprehensive solvency ratio of life insurance improved to 247% and remains substantial higher than regulatory threshold.
We current have a BUY rating on China Taiping. We will provide further update after result briefing on 30th Aug 2022.