Company Reports

Ping An's first-half operating profit after tax, or OPAT, growth accelerated to 8.3% year on year from 7.6% in the first quarter, driven by wealth management turnaround that offset slower growth in the life and P&C segments.

Ping An's first-quarter operating profit after tax, or OPAT, grew 7.6% year on year. A 36% drop in property-casualty insurance profits was more than offset by contributions from life insurance and asset management.

In China's competitive insurance market, Ping An stands out for its proprietary technology that enhances the customer experience and supports cross-selling across its four core ecosystems: integrated finance, automotive, healthcare, and eldercare. We expect this technological edge to lead to stronger underwriting profitability and above-peer long-term growth.

Ping An's 2025 operating profit after tax accelerated to 10%. The acceleration was driven by improved property and casualty underwriting profits on milder catastrophe losses, and less loss in its asset management businesses.

H-shares of China's life insurers rallied 6%-21% year to date following robust insurance sales in the new year and alongside strong performances of the A-shares.

In China's highly competitive insurance market, Ping An differentiates itself through its ability to utilize proprietary technology to enhance the customer experience and drive cross-sales across its major ecosystems: integrated finance, auto, healthcare, and eldercare. We believe its competitive advantage should result in an above-peer underwriting profitability and growth in the long run.

Ping An Insurance's third-quarter operating profit after tax rose 7% year over year. The acceleration was driven by faster growth in property and casualty, and less loss at its asset management businesses.

Ping An Insurance's interim operating profit after tax rose 3.7% year over year, as its life, property & casualty, and asset management businesses grew 2.5%, 1%, and 110%, respectively.

In China's highly competitive insurance market, Ping An differentiates itself through its ability to utilize proprietary technology to enhance the customer experience and drive cross-sales across its major ecosystems: integrated finance, auto, healthcare, and eldercare. We believe its competitive advantage results in a better outlook than peers in terms of underwriting profitability and growth.

In China's highly competitive insurance market, Ping An differentiates itself through its ability to utilize proprietary technology to enhance the customer experience and drive cross-sales across its major ecosystems: integrated finance, auto, healthcare, and eldercare. We believe its competitive advantage results in a better outlook than peers in terms of underwriting profitability and growth.

Ping An Insurance's first-quarter total revenue and net profit declined 5% and 26%, respectively, year on year.

We retain our fair value estimate for Ping An Insurance at CNY 58 per A share and HKD 63 per H share after the insurer reported in-line 2024 net profit growth of 48%. Group operating profit after tax, or OPAT, rose 9%, surpassing our 5% forecast. However, life insurance OPAT declined by 2% due to unfavorable assumption changes to reflect falling interest rates. The stock remains undervalued, trading at 0.6 times 2025 price to embedded value, or EV.

We retain our fair value estimates for Chinese insurers after a recent regulatory announcement that establishes a dynamic adjustment mechanism for the pricing rate on life insurance products. The current pricing rate remains unchanged, as the latest published reference rate did not trigger the adjustment mechanism. While market concerns over insurers’ spread loss risks are likely to persist, the pricing adjustment mechanism, coupled with recent central bank warnings about risks in China’s overheated bond market—where long-term yields have reached record lows—should help support long-term rates and enhance insurers’ liability cost management.

We maintain our fair value estimates for China Life at HKD 20 per share, China Pacific Insurance at HKD 30, and New China Life at HKD 22 following third-quarter results, which showed robust year-over-year net profit growth of 174%, 65%, and 117%, respectively. These results were largely in line, with strong growth driven by investment returns amid a 17% rise in the CSI 300 Index during the quarter following a lackluster market environment in the first half of the year. Trading at 0.3-0.4 times their 2024 embedded value, China Life and China Pacific remain undervalued, while New China Life is fairly valued. New China Life and China Life led earnings growth among Chinese life insurers due to their high sensitivity to stock market movements. Mark-to-market equity investments represent 141% of New China Life’s and 81% of China Life’s net assets, significantly above the 8%-60% of their peers. As both companies base dividends on net profit, we anticipate strong dividend growth per share versus 2023, though we are skeptical the higher payments can be maintained longer-term. China Pacific's dividend outlook is less certain, as its policy is based on factors including net profit, post-tax operating profit, and solvency ratio.

We have raised our fair value estimate for Ping An Insurance to CNY 58 from CNY 55 per A share and to HKD 63 from HKD 59 per H share after strong third-quarter results. Year-to-date net profit was up 36%, mainly due to a 69% increase in investment income from the September stock market rally. Both life as well as property and casualty, or P&C, insurance segments show recovery, with a quarter-on-quarter increase in life insurance agents and reduced underwriting losses in credit guarantee insurance. We now expect full-year revenue growth of 7% and net profit growth of 44%, up from previous estimates of 6% and 34%, respectively.

In China's highly competitive insurance market, Ping An differentiates itself with its ability to use proprietary technology to strengthen the customer experience and enhance cross-sales for its major ecosystems: integrated finance, auto, healthcare, and eldercare. We believe its competitive advantage results in a better outlook than peers in terms of underwriting profitability and growth.

We retain our fair value estimate for Ping An Insurance at HKD 59 per H share after the company’s broadly in-line 7% year-on-year growth in interim net profit on a 57% increase in investment return thanks to better stock market performance. Though the 11% year-on-year new business value, or VNB, growth was softer than our expected 13%, we believe the stabilizing agent headcount and low base in the second half of 2023 should translate to respective full-year forecast 20% and 34% growth in VNB and net profit in 2024. The stock remains undervalued, trading at 0.5 times 2024 price to embedded value. Among Chinese insurers, we like Ping An and China Pacific Insurance, best for above-peer VNB growth and lower-than-peer policy costs. Offering over 7% dividend yield, we believe Ping An remains an attractive dividend play.

In China's highly competitive insurance market, Ping An differentiates itself with its ability to use proprietary technology to strengthen the customer experience and enhance cross-sales for its major ecosystems: integrated finance, auto, healthcare, and eldercare. We believe its competitive advantage results in a better outlook than peers in terms of underwriting profitability and growth.

We expect China’s life insurers under our coverage to report a double-digit increase in second-quarter net profits versus the year-on-year contraction in the first quarter. While we expect their new business value growth in the first half will slow from 20%-50% in the first quarter, growth should stay healthy at 10% to 25% thanks to margin improvement and resilient demand for savings products as the deposit rate continues to trend down. We also expect property-casualty underwriting margin to improve from the first quarter, helped by reduced catastrophe losses. Despite the earnings improvement, we expect industrywide headwinds, including falling asset yield, potential commission rate cut in the agent channel, and uncertainty in catastrophe losses, will continue to weigh on investor sentiment.

Ping An Insurance’s first-quarter 2024 year-on-year net profit decline narrowed to 4% versus the 23% decline in 2023. The results highlight stronger-than-expected growth in both new business value, or NBV, and operating profit after tax, or OPAT, driven by an improved life insurance margin. We expect this trend to continue in 2024, but full-year NBV growth is likely to moderate given a higher base in the second and third quarters of 2023 as a result of robust sales of last-batch 3.5% pricing savings-type products. Thus, we leave our assumptions largely unchanged and retain our fair value estimate at CNY 60 per A-share (HKD 65 per H-share) for Ping An.