第一生命保险（8750）：2025财年3月业绩利润超预期，但前景令人失望

FY3/25EFY3/26E28.2533.2146.6182.42112.06116.2683.50113.63117.871,052.381,063.48 FY3/27E56.49124.74127.231,069.52 Shujin Chen, CFA * | Equity Analyst852 3743 8747 | shujin.chen@jefferies.com The Long View: Dai-ichi Life HDInvestment Thesis / Where We DifferWe rate Daiichi Life Hold with a PT of JPY1,200 for the following reasons:1) TSR yield of 6% unattractive relative to P&C at 6-8%, 2) limited structuralprofit growth from now onwards given still shrinking in-force business, 3)impact of higher JGB yield already reflected in new consensus earnings.Base Case,¥1,200, +12%We arrive at our PT of JPY1,200 by using acombination of GGM based on the avg core ROE(10.6%) and ROE with cross-holdings unwind(10.7%) for FY23-26E, as well as DDM includingbuybacks. DY of 3.1%. Our PT implies fwd PE of10.7x and fwd PB of 1.16x.Sustainability MattersTop material Issues1) Selling Practice & Product Labeling: Dai-ichi Life realigned its marketing practices and reinforcecompliance among its sales force, which will lead to a recovery of confidence in the firm amongcustomers.2) Product Design & Lifecycle Management: Digitalization enables the firm to develop new marketingchannels and new products. The products and service not just to cover the risks, but to lower the risksutilizing various data will benefit both insurers and customers.Company Target1) Reduce GHG emission by 50% (from 2019 level) by 2025 (Scope 1+2) and by 30% by 2030 (Scope 3).2) Increase the total loans and investment for climate change solutions to ¥950 bn by Mar 2025.3) Aim for stewardship activities on engagement in all asset classes as mid term goalQuestions to Management1) How will the margin (New business margin) improve or recover as the sales activities getnormalized?2) Will the reduction in GHG emission in your investment & loan portfolio lead to a better investmentreturn from mid to long term perspective?Please see important disclosure information on pages 5 - 10 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,¥1,576.63, +47%Our upside PT of JPY1,577 assumes 0.4ppthigher investment yield (base case FY24E: 2.2%)and 15% JPY depreciation tailwind with a fwdconstant PE. Downside Scenario,¥822.92, -23%Our downside PT of JPY823 assumes 0.4pptlower investment yield (base case FY24E: 2.2%)and 15% JPY appreciation headwind with a fwdconstant PE.Catalysts1) Upcoming result and financial target refreshto confirm VNB recovery trend and net spreadwiden; 2) Positive moves in Japan equity marketleading to larger than expected gains; 3) Upsidesurprise in shareholder return, e.g. the size ofbuyback. 2 Figure 2 - Daiichi Life Result Snapshot.Source: Jefferies estimates, CompanyPlease see important disclosure information on pages 5 - 10 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Figure 3 - Daiichi Life Income Statement.Consolidated Income Statement (¥bn)Rec RevDaiichi LifeDaiichi FrontierNeo FirstProtectiveTALRecurring Profits at Major SubsDaiichi LifeDaiichi FrontierNeo FirstProtectiveTALNet ProfitsDaiichi LifeDaiichi FrontierNeo FirstProtectiveTALOthersAdjusted ProfitsDaiichi LifeDaiichi FrontierNeo FirstProtectiveTALDLVNSource: Jefferies estimates, CompanyPlease see important disclosure information on pages 5 - 10 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. We would like to thank Iris Tian, employee of Evalueserve Inc., for providing research support services to our preparation of this report.We would like to thank Josie Shi, employee of Evalueserve Inc., for providing research support services to our preparation of this report.Company DescriptionDai-ichi Life HDDai-ichi Life is a top life insurer in Japan. It demutualized and went IPO on the Tokyo Stock Exchange in 2010. The company mainly provideslife insurance and other products services through Domestic Life, Overseas Insurance, and other business three segments. The DomesticLife segment offers traditional life products and savings-type products. Overseas Insurance segment offers life insurance in 9 countires withregional headquarters in New York and Singapore. The other business segment includes asset management and related businesses. Dai-ichinow commands more than 10% of Japan's insurance market shares.Company Valuation/RisksDai-ichi Life HDValuation: We value Daiichi using a combination of GGM and DDM to account for both the underlying ROE improvement and the capital returnpotential. For our GGM model, we take the average of the underlying ROE and the ROE with cross-holdings unwind in FY24-26E, to arrive at atarget PB against assumed cost of equity. For our DDM, we discount the total capital return per share including both dividend and buyback atthe same cost of equity and derive a terminal value using constant growth rate.Downside risks to price target: subdued insurance demand from the market, the e