We increase our fair value estimate for PICC Group to HKD 4.80 per share from HKD 3.8 per share after the Group reported 88% growth in 2024 net profit driven by 86% increase in investment income. The valuation change factors in 50-80 basis points declines to P&C combined ratio assumptions and 100-200 basis points reductions to life and health loss ratios during our forecast period, driven by management’s higher P&C margin guidance, better-than-expected life and health margins in 2024, and potential regulatory tailwinds in 2025. P&C, life, and health insurance represented 77%, 11%, and 5% net assets of the group. Our fair value implies 1.1, 0.3, and 0.3 times 2025 price/book ratios for P&C, life, and health business, respectively, and a 40% conglomerate discount, which is due to market concerns about the value-dilutive effect of its non-P&C insurance business and lower flexibility in the dividend payout ratio. We believe the stock is undervalued at 0.6 2025 price/book and we now prefer PICC Group over PICC P&C, as the latter is fairly valued.