The president was replaced twice in one year.
Text/Daily Financial Report Li Jia
In the operation and development of insurance companies, the asset side and the liability side are "two pillars" that complement each other, and their importance is equal and neither party can ignore them. Especially for those large insurance companies with huge premium income, their demand for investment management capabilities has reached a higher level. In this process, the core leaders responsible for asset management and their relevant responsible personnel will play a crucial role.
Recently, the management of assets of more than 1.6 trillion yuan of people's insurance assets on the high-level personnel changes, the company issued an announcement that after the company's deliberation, Huang Benyao no longer served as the president, the board of directors designated Huang Ming as the company's interim head.
Under the new personnel appointment, the "Daily Financial Report" also noted that in April this year, Huang Benyao was approved by the regulator for the qualification of president of PICC Assets only about a month later, and he was quickly transferred to China Life Group as a member of the Party Committee, that is to say, from the timeline, Huang Benyao has been in charge of PICC assets for less than a year.
On the other side of the coin, generally speaking, state-owned enterprises have always maintained a high degree of rigor in personnel transfers, but the reasons and intentions behind the top insurers' high-level personnel adjustments in such a tight time frame are really curious.
The president has been renewed twice in a year, what is the resume of the "new handsome" Huang Ming?
Looking back, in the past year, PICC Asset Management's key leadership has undergone two changes. First of all, in July 2023, Zeng Beichuan will no longer serve as the president of PICC Assets because he has reached the statutory retirement age. Subsequently, the board of directors of PICC Asset Management made a decision to temporarily appoint Huang Benyao as the principal person in charge of the company, until the board of directors elects a new president and his qualifications are formally approved by the State Administration of Financial Supervision and Administration.
It was not until April this year that Huang Benyao's qualifications to serve as the president of PICC Assets were approved by the regulatory authorities. Only a month and a half later, on May 22, the group leadership information updated on the official website of China Life Group showed that Huang Benyao had been appointed as a member of the Party Committee of China Life Group, becoming the third post-70s generation in the group's current party committee.
It is reported that Huang Benyao is a "veteran" of Chinese Insurance, not only has a doctorate degree in management, but also has rich experience in investment management, and has successively served as assistant to the general manager of the asset development planning department and market development department of PICC, and the general manager of the financial accounting department, portfolio management department and stock investment department; Member of the Party Committee, Vice President, Chief Investment Officer and Chief Financial Officer of PICC Health; Vice President and Interim Head of PICC Assets.
So, what is the origin of the "successor" Huang Ming this time?
According to public information, Huang Ming is a doctor of economics with a strong academic background, and is currently a member of the Party Committee, vice president, and interim head of PICC Assets. Prior to that, Huang Ming also served as the head of the third department of the investment banking department of Guangdong Securities and the general manager of the securities research center. Subsequently, he joined PICC Asset Management and served as fund analyst, chief analyst and deputy general manager of the equity investment department, deputy general manager and general manager of the banking/foreign exchange business department, general manager of the fund investment department, general manager of the equity research and investment department and other important positions.
It is worth mentioning that Huang Ming has also held senior management positions in many departments of Taiping Group, and has served as a member of the Party Committee, assistant general manager and investment director of Taiping Life; Member of the Party Committee, Deputy General Manager of Taiping Financial Audit Services (Shenzhen) Co., Ltd. and Audit Responsible Person of Taiping Asset Management; Member of the Party Committee and Deputy General Manager of Taiping Petrochemical Financial Leasing.
It is not difficult to see from his resume that Huang Ming belongs to an industry "old man" with rich experience in securities, insurance, financial leasing and other important financial fields, which have laid the foundation for forging his unique and charming investment style.
Can "newcomers" bring new atmosphere?
As an "expert" in insurance investment, how does Huang Ming view market opportunities? How will PICC Assets under the leadership of "newcomers" carry forward the past and forge ahead into the future and enhance their core competitiveness?
For equity market investment, Huang Ming has his own unique opinions, and has said in public channels that he will continue to increase the allocation of low-valuation and high-dividend stocks, mainly focusing on three aspects: first, public utility companies with good business models, stable profits and cash flow; second, upstream and midstream manufacturing companies with good supply and demand structure and strong competitiveness; The third is the leading large consumption enterprises that are gradually entering the mature period and may increase cash dividends after the decline in capital expenditure.
Taking a peek at the whole picture, it is clear that Huang Ming's allocation strategy in the equity market mainly revolves around low valuation and high dividends. On the one hand, low valuations ensure that portfolios have a high margin of safety, allowing them to maintain relatively stable performance even in market downturns, avoiding sharp declines. On the other hand, when the market recovers, this type of portfolio can show good resilience and resilience, and achieve higher returns. At the same time, high-dividend stocks ensure that the portfolio can receive stable dividend income every year, further enhancing the overall investment return.
The core logic is to build a stable and resilient portfolio by selecting stocks with low valuations and high dividends, so as to open up the equity market as a trump card to achieve the goal of new incremental performance that is both stable and high-yielding.
In addition, under the practical problem of tight supply of high-quality non-standard assets faced by insurance companies due to the significant reduction in the supply of high-quality urban investment projects due to the impact of policies, Huang Ming said: "We pay special attention to ABS, private REITs and quasi-REITs products as a supplementary strategy. Second, we focus on high-quality industrial bonds, especially in areas such as transportation and utilities. These 5-year and 3A-level bonds have a high long-term allocation. At the same time, we are also paying close attention to banks' capital supplementary bonds, which we expect to see an increase in supply in 2024 and become our key allocation. ”
It can be expected that such an investment strategy logic and operation idea may be the current Huang Ming to bring in PICC assets, integrate into the company's development context, and plan for the next development.
The performance gap widened, and the investment income was less than expected
As the "helmsman" of PICC Assets, it has been replaced in a hurry in less than a year, which undoubtedly releases a big signal to the industry: asset management has become the top priority of PICC Group, and it is the core essence to drive income growth to feed back to the insurance side with a steady investment strategy.
Objectively speaking, although PICC Asset Management is also a leading insurance asset management company, it is still slightly inferior to the "Big Three" asset management companies of China Life, Ping An and Taikang, and has even been surpassed by the latter catch-up Sunshine Assets and Huatai Assets.
Taking the performance of 2023 as an example, in the ranking of all 34 domestic insurance asset management institutions, PICC Assets only retained its tenth position with a revenue of 1.526 billion yuan and a net profit of 498 million yuan, while China Life Asset Management, Ping An Asset Management and Taikang Asset Management achieved revenue of 5.257 billion yuan, 4.275 billion yuan and 5.103 billion yuan respectively last year; The net profit in the same period was 2.876 billion yuan, 2.704 billion yuan and 2.08 billion yuan respectively. It can be seen that the gap between PICC assets and the "Big Three" is not small, and how to catch up is a difficult problem.
From 2018 to 2023, PICC Assets achieved revenue of 914 million yuan, 918 million yuan, 1.109 billion yuan, 1.274 billion yuan, 1.414 billion yuan and 1.526 billion yuan respectively, and net profit of 230 million yuan, 234 million yuan, 285 million yuan, 413 million yuan, 416 million yuan and 498 million yuan respectively in the same period.
According to calculations, the compound growth rate of revenue and net profit of PICC assets in the past six years reached 8.92% and 13.74% respectively.
Looking at the core indicator of measuring the investment ability of an asset management company--- investment income, PICC Asset Management has only begun to disclose the investment income indicators in detail since 2021, and the data shows that from 2020 to 2023, its investment income will be 106 million yuan, 116 million yuan, 112 million yuan and 91 million yuan respectively, and the year-on-year growth rate during the period will be 9.43%, -3.45% and -18.75%.
In addition, according to the official WeChat disclosure of PICC Assets, from 2020 to 2022, the total investment returns of PICC Assets will be 6.01%, 5.99% and 5.02% respectively.
Combining the two indicators, it is not difficult to see that due to factors such as complex and changeable forms at home and abroad, fluctuations in the capital market and the decline in long-term interest rates, the investment side of PICC assets has faced certain challenges in recent years, and the income situation is not satisfactory.
In this regard, PICC Group highlighted in its 2023 performance report that in 2024, PICC Asset Management will enhance its active management capabilities and strengthen its equity investment capabilities. Stabilize the fixed income fundamentals and strengthen trading capacity-building; Exploring alternative investment growth opportunities and continuously optimizing overseas asset allocation.
The results are significantly differentiated, and there are hidden worries in public funds
This year is the first year of the 20th anniversary of the development of PICC Asset Management, and how to successfully achieve the annual target and improve the asset management capability is the most critical part of the company.
It is reported that at present, PICC Assets has multi-dimensional investment business capabilities, including special insurance account management, public funds, portfolio products, alternative investment and international business. As of the end of 2023, its assets under management reached 1.68 trillion yuan, an increase of 14.7% from the beginning of the year.
However, judging from the specific performance in 2023, the performance of each business is different, and the differentiation is more significant.
Specifically, in 2023, PICC Assets will sign a "one-to-one" trusteeship contract with 31 entrusting parties, with assets of 1.13 trillion yuan, accounting for about 70% of the total management scale, an increase from 1.06 trillion yuan in the same period in 2022. However, the management fee income obtained by this business declined, only 773 million yuan, a year-on-year decrease of 5.04%.
In terms of asset management products, the number of its clients increased from 88 in 2022 to 144, with assets of 378.998 billion yuan, a year-on-year increase of 53.72%. Correspondingly, the management fee income charged by PICC Asset Management for the management of these asset management products has increased, reaching 404 million yuan, a year-on-year increase of 33.33%.
In addition, the number of entrusting parties of the debt investment plan increased to 37, with an asset scale of 50.526 billion yuan, a year-on-year increase of 11.45%; The number of equity plan entrustors decreased to 7, and the asset scale only increased by 1.87% year-on-year to 16.844 billion yuan. During the same period, the total management fee income of the two businesses was approximately 104 million yuan, an increase of 8.33% year-on-year.
It is worth noting that in terms of public fund business, the establishment of public fund management companies and the independent operation of public offering business can be regarded as the direction of PICC Assets' focus in recent years.
However, judging from the results achieved so far, it can be said that there is a long way to go, and the scale of its entire public fund management has shrunk linearly. As of December 31, 2023, the scale of PICC Asset Public Offering Fund was 13.365 billion yuan, an increase from 9.356 billion yuan in 2022. However, by the first quarter of 2024, the data will shrink to 11.287 billion yuan.
You must know that as early as 2003, when the company was established, PICC Assets included public funds in the scope of allocation, successfully established a fund investment department in 2010, obtained public fund management qualifications in 2017, and at the end of 2018, its public fund asset management reached a peak of 42.89 billion yuan.
In other words, judging from the current data, the scale of the PICC asset public fund has shrunk by nearly 74% compared with the high point in 2018, and the decline is not "severe".
Not only that, the aggravated loss of talents also restricts the pace of PICC asset development public funds. Wind data shows that since 2020, a total of 14 fund managers have left PICC Assets, and the number of fund managers who have left in the past year is 6, which is 1.85 higher than the industry average. At present, there are only 11 fund managers under the umbrella, which is far lower than the industry average of 22.88, and the average tenure of fund managers is 3.22 years, which is also lower than the industry average of 4.51 years.
It is under such circumstances that the frequent changes of the "top leader" of PICC Asset Management seem to be reasonable. This year's equity market has also shown a volatile trend, and the future trend of the capital market is still full of uncertainty.
At this time, as a group of "brother and sister" insurance companies under the PICC Group, how to grasp the balance between assets and liabilities, and achieve steady growth of assets and sustainable returns under the premise of stability is obviously a big test for Huang Ming, who has just taken office, and other senior executives in terms of investment strategy, excellent insight and determination. It deserves our long-term attention.