Core Points - The company reported a stable growth in operating performance for the year, achieving a revenue of 709.4 billion yuan, a year-on-year increase of 6.4%, and a net profit of 42.9 billion yuan, up 88.2% from the previous year [2] - The company aims to build a world-class insurance financial group by focusing on five key areas: excellent functionality, efficient operations, clear core business, modern governance, and international competitiveness [3] - In 2025, the company will implement its strategy by focusing on six reforms and four solid actions to enhance innovation and management efficiency [4][5] Financial Performance - The company achieved a return on equity (ROE) of 16.7%, an increase of 7.1 percentage points year-on-year [2] - The company handled nearly 500,000 claims daily, with a payout of 1.23 billion yuan [2] Strategic Development - The company emphasizes the importance of serving the public and contributing to social governance and economic development [3] - The strategic focus includes enhancing risk management, improving service quality, and optimizing product offerings [6][7] Reform Initiatives - The company plans to deepen governance reforms, enhance strategic management, and improve resource allocation to respond effectively to market competition [5] - The company will also focus on digital transformation and talent development to create a conducive working environment [5][6]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][11] Core Insights - The company achieved a net profit of 32.17 billion yuan in 2024, representing a year-on-year increase of 30.9%, aligning with expectations. The underwriting profit was 5.71 billion yuan, down 43.9% year-on-year, while total investment income reached 34.94 billion yuan, up 67.9% year-on-year. The comprehensive cost ratio (COR) increased by 1.0 percentage points to 98.8% due to frequent natural disasters [4][5] - The company is a leader in the property and casualty insurance industry, with a competitive advantage in the market. The total dividend per share for the year was 0.54 yuan, an increase of 10.2% year-on-year, with a dividend payout ratio of 37.3% [4][6] - The company has adjusted its net profit forecasts for 2025-2026 to 34.91 billion yuan and 38.24 billion yuan, respectively, while introducing a new forecast for 2027 at 41.76 billion yuan, reflecting year-on-year growth rates of 8.5%, 9.5%, and 9.2% [4][7] Financial Summary and Valuation Metrics - Total premium income for 2024 was 538.1 billion yuan, a year-on-year increase of 4.3%, with service income at 485.2 billion yuan, up 6.1%. The breakdown includes 294.7 billion yuan from auto insurance and 190.5 billion yuan from non-auto insurance, with respective year-on-year growth rates of 4.5% and 8.8% [5][7] - The company's total investment income for 2024 was 34.9 billion yuan, with an annualized total investment return rate of 5.5%, up 2.0 percentage points year-on-year. Investment assets increased by 12.6% to 676.5 billion yuan [6][7] - The projected earnings per share (EPS) for 2025, 2026, and 2027 are 1.6 yuan, 1.7 yuan, and 1.9 yuan, respectively, with corresponding price-to-earnings (P/E) ratios of 8.5, 7.8, and 7.1 [7]

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 15.50 [8][9]. Core Views - The company's 2024 EPS is projected to be RMB 1.45, representing a 31% year-on-year increase, driven mainly by improved equity investments [1]. - The overall combined ratio (COR) for the company is expected to be 98.8%, reflecting a 1 percentage point increase year-on-year, primarily due to natural disaster impacts [1]. - The company is anticipated to maintain steady growth in its business, particularly in the auto insurance sector, which is expected to grow at a rate of 4.5% in 2024 [2]. Summary by Sections Auto Insurance Performance - The auto insurance COR for 2024 is projected at 96.8%, remaining stable compared to 96.9% in 2023. The loss ratio has increased by 2.2 percentage points to 72.6%, offset by a decrease in expense ratio [2]. - The auto insurance business revenue is expected to grow by 4.5% year-on-year, indicating a stable market outlook [2]. Non-Auto Insurance Performance - The non-auto insurance COR is estimated to rise by 2.8 percentage points to 101.9% in 2024, indicating underwriting losses. The loss ratio has increased by 2.7 percentage points, while the expense ratio remains stable [3]. - Revenue from property insurance is expected to grow by 4.7%, with a COR of 113.4%. Agricultural insurance revenue is projected to increase by 4.9%, with a COR of 99.7% [3]. Capital Returns - The return on equity (ROE) for the company is expected to rise by 2 percentage points to 13.1% in 2024, supported by favorable investment conditions. The total investment return rate is projected to increase to 5.5% [4]. - The company plans to distribute a dividend of RMB 0.54 per share for 2024, up from RMB 0.49 in 2023, with a payout ratio of 37% [4]. Earnings Forecast and Valuation - The EPS forecasts for 2025, 2026, and 2027 have been raised to RMB 1.62, RMB 1.69, and RMB 1.82 respectively, reflecting adjustments of 12.7% and 8.0% for the first two years [5]. - The target price based on DCF valuation has been increased to HKD 15.50 from HKD 13.60, maintaining the "Buy" rating [5].

Core Viewpoint - China Pacific Insurance (02328) maintains an "outperform" rating, with a target price increase of 17.6% to HKD 14.7, reflecting a positive outlook for 2025 despite challenges in 2024 due to natural disaster losses [1] Group 1: Financial Performance - In 2024, the company's premium income increased by 4.3% year-on-year to CNY 538.1 billion, while market share decreased by 0.7 percentage points to 31.8% [2] - Net profit rose by 30.9% to CNY 32.2 billion, aligning with expectations, driven by improved stock market conditions [3] - Total investment assets grew by 4.3% year-on-year, with total investment return increasing by 2.0 percentage points to 5.5% [3] Group 2: Underwriting and Cost Ratios - The combined ratio (CoR) for 2024 increased by 1.0 percentage point to 98.8%, primarily due to higher-than-expected natural disaster losses [2] - The combined loss ratio rose by 2.4 percentage points to 73%, with the net loss from major disasters exceeding the average of the past five years by 50.9% [2] - The CoR for auto insurance improved by 0.1 percentage point to 96.8%, while the non-auto insurance CoR decreased by 2.8 percentage points to 101.9% [2] Group 3: Dividend and Long-term Outlook - The annual dividend per share increased by 10.4% to CNY 0.54, slightly below expectations, but the long-term operational trend supports strong future dividend capacity [4] - The company is viewed as a long-term stable investment option, considering dividend growth and net asset increases [4]

Investment Rating - The investment rating for the company is "Outperform the Market" [6] Core Views - The company is expected to achieve a record net profit attributable to shareholders of 32.16 billion yuan in 2024, representing a year-on-year growth of 30.9% driven by significant investment income growth and business structure optimization [1] - The company's market share in the insurance sector remains strong at 31.8%, with premium income from original insurance reaching 538.06 billion yuan, a stable growth of 4.3% year-on-year [1] - The company is focusing on enhancing its risk models and expanding into the emerging home and self-car insurance sectors, with premium income from car insurance reaching 294.70 billion yuan, a year-on-year increase of 4.5% [2] - The non-auto insurance segment has shown impressive growth, with premium income rising to 190.52 billion yuan, an increase of 8.8% year-on-year, contributing to 39.3% of total premium income [3] - The company has optimized its asset allocation, achieving an investment return of 15.12 billion yuan, a remarkable increase of 270.8% year-on-year, with a total investment return rate of 5.5% [3] Summary by Sections Financial Performance - In 2024, the company is projected to generate total revenue of 513.68 billion yuan, reflecting an 8.53% increase from 2023 [5] - The diluted earnings per share (EPS) for 2025, 2026, and 2027 are forecasted to be 1.55, 1.67, and 1.77 yuan respectively, with corresponding price-to-book ratios (P/B) of 1.15, 1.10, and 1.06 [4][5] Business Segments - The car insurance business has improved its market share to 38.8%, with a combined ratio (COR) of 96.8%, which is better than the industry average [2] - The non-auto insurance business has seen a significant increase in premium income, particularly in personal non-auto insurance, which grew by 18% year-on-year [3] Investment Strategy - The company is capitalizing on market opportunities by increasing its allocation to long-term bonds and high-dividend stocks, with a notable increase in government bond investment share by 9.9 percentage points year-on-year [3] - The company’s investment strategy has led to a robust investment income performance, significantly outperforming the CSI 800 index by 27.9% over the past three years [3]

Group 1: Financial Performance - The company reported original insurance premium income of RMB 538.055 billion, a year-on-year increase of 4.3% [1] - Underwriting profit decreased to RMB 5.713 billion, down 43.9% year-on-year [1] - Net profit increased to RMB 32.161 billion, reflecting a year-on-year growth of 30.9% [1] - Basic earnings per share were RMB 1.446, with a proposed final dividend of RMB 0.332 per share [1] Group 2: Strategic Initiatives - The company actively engaged in major national strategies and provided quality insurance services, covering insurance liabilities amounting to RMB 298.8 trillion [2] - Established various insurance initiatives, including the China Integrated Circuit Co-insurance Body and the Green Ship Insurance Community [2] - Launched the first comprehensive catastrophe insurance in Hebei and developed high-level insurance centers in Shanghai [2] Group 3: Social Responsibility and Innovation - The company participated in social security system construction, serving 840 million people through social insurance services [3] - Agricultural insurance provided risk coverage for 55.42 million farming households, amounting to RMB 2.1 trillion [3] - The company introduced innovative insurance products and enhanced digital transformation, including AI platform applications [3]

Financial Performance - The company's original insurance premium income for 2024 reached RMB 538.06 billion, representing a 4.3% increase from RMB 515.81 billion in 2023[9]. - Insurance service revenue increased by 6.1% to RMB 485.22 billion in 2024, up from RMB 457.20 billion in 2023[9]. - Underwriting profit decreased by 43.9% to RMB 57.13 billion in 2024, compared to RMB 101.89 billion in 2023[9]. - Net profit for 2024 was RMB 32.16 billion, reflecting a 30.9% increase from RMB 24.57 billion in 2023[9]. - The comprehensive cost ratio stood at 98.8%, with underwriting profit of CNY 5.713 billion and net profit of CNY 32.161 billion, resulting in a return on equity of 13.0%[21]. - The company reported a net profit of CNY 32.16 billion, marking a historical high, with a return on equity of 13.0%, up by 2.2 percentage points year-on-year[27]. - The company's pre-tax profit for 2024 was RMB 38.02 billion, a year-on-year increase of RMB 9.98 billion (or 35.6%)[61]. - Net profit rose to RMB 32.16 billion, up RMB 7.60 billion (or 30.9%) from RMB 24.57 billion in 2023, with basic earnings per share of RMB 1.446[63]. Assets and Liabilities - The company's total assets as of December 31, 2024, were RMB 778.24 billion, a 10.6% increase from RMB 703.62 billion in 2023[11]. - Total liabilities increased by 10.3% to RMB 517.62 billion in 2024, up from RMB 469.32 billion in 2023[11]. - The company's total investment assets amounted to RMB 676.51 billion, a 12.6% increase from the previous year[51]. - The company's cash and cash equivalents (excluding accrued interest) stood at RMB 19.36 billion as of December 31, 2024[66]. - The debt-to-asset ratio decreased to 63.9%, down 1.6 percentage points from 65.5% at the beginning of the year[67]. Dividends - The company proposed a final dividend of RMB 0.332 per share, with a total dividend payout including interim dividends amounting to RMB 0.54 per share[15]. - The company distributed an interim dividend of CNY 0.208 per share and proposed a final dividend of CNY 0.332 per share[21]. - The company plans to distribute a total dividend of RMB 0.54 per share for the fiscal year 2024, pending shareholder approval[79]. - The company plans to distribute a final dividend of HKD 0.332 per share for the year ending December 31, 2024, totaling approximately HKD 73.85 billion[131]. - The interim dividend of HKD 0.208 per share for the six months ending June 30, 2024, was approved by shareholders on October 29, 2024, amounting to about HKD 46.26 billion[131]. Market Presence and Share - The company achieved a market share of 31.8% in the insurance sector[15]. - The company achieved original insurance premium income of CNY 538.06 billion, a year-on-year increase of 4.3%, maintaining a market share of 31.8% in China's property insurance market[26]. - The total premium income from the agency sales channel was RMB 325,754 million, accounting for 60.5% of total premiums, with a 1.3% increase from 2023[34]. - The top ten regions contributed a total premium income of RMB 538,055 million, reflecting a 4.3% growth compared to RMB 515,807 million in 2023[35]. Claims and Insurance Services - The company processed over 180 million claims during the year, demonstrating its commitment to disaster response and customer service[23]. - Agricultural insurance provided risk protection for 55.42 million farming households, amounting to CNY 2.1 trillion in coverage[23]. - The company expanded its market presence by launching specialized products for small and micro enterprises, providing risk protection of CNY 45 billion to 97,000 businesses[29]. - The company processed over 180 million claims, a year-on-year increase of 32.0%[31]. - The company achieved an insurance service revenue of RMB 371.12 billion in liability insurance, representing a year-on-year growth of 12.8%[43]. Investment Performance - The total investment income for 2024 was RMB 34.94 billion, with an investment return rate of 5.5%[15]. - Total investment income reached RMB 349.37 billion, an increase of RMB 141.30 billion year-on-year, with a total investment return rate of 5.5%, up 2.0 percentage points[50]. - Fixed income investments reached RMB 407.03 billion, up RMB 57.28 billion (or 16.4%) from the beginning of the year, accounting for 60.2% of total investments[56]. - Equity investments totaled RMB 170.03 billion, an increase of RMB 11.61 billion (or 7.3%), with a decrease in proportion to 25.1%[56]. Risk Management and Compliance - The company has a strong focus on compliance and risk management, with a dedicated Chief Risk Officer overseeing these areas[115]. - The company is committed to strengthening internal controls and risk management in accordance with relevant laws and regulations[200]. - The company plans to enhance risk management through early identification and proactive measures, focusing on training and cultural development[123]. - The company maintains a good compliance status with no significant systemic compliance risks reported in 2024[128]. Innovation and Product Development - The company launched several innovative insurance products, including the "PICC China Earthquake Catastrophe Model" and "Cybersecurity Insurance Risk Pricing Model"[23]. - The company is committed to developing new products and technologies to meet market demands[111]. - The company is actively expanding its insurance coverage for high-tech and specialized enterprises, addressing diverse risk protection needs[45]. Corporate Governance - The supervisory board held 7 meetings this year, reviewing 53 proposals and reports, and focusing on risk management and financial oversight[193]. - The audit committee reviewed the audited performance of the company and its subsidiaries for the year[188]. - The supervisory board aims to enhance corporate governance capabilities and promote orderly reforms in 2025[199]. - The independent directors confirmed that the related party transactions were conducted under normal business terms and in the best interest of shareholders[184]. Employee Relations - The company paid a total of RMB 40.184 billion in employee compensation in 2024, which includes fixed salaries and performance bonuses[81]. - The company has a strong commitment to employee relations, which is considered a key factor for its success[129].

Core Viewpoint - China People's Insurance Group and its subsidiaries have been recognized for their innovative financial consumer protection mechanisms, with a total of 10 cases awarded in various categories, highlighting their leadership in the insurance industry [1] Group 1: Financial Consumer Protection Mechanism Innovation - China People's Insurance Group emphasizes the importance of protecting financial consumers' rights as part of its brand integrity and high-quality development [4] - The company has established a multi-level consumer protection management structure, ensuring comprehensive participation and accountability across its subsidiaries [4][5] - Significant resources are allocated to enhance consumer protection functions, including financial education and dispute resolution [5] Group 2: Consumer Information Protection - China People's Insurance Group has implemented a "four-line defense" system for personal information protection, ensuring comprehensive risk management [10] - The company has conducted over 1,200 impact assessments and 1,700 on-site inspections to strengthen internal controls [10][11] - It has achieved ISO 27001 certification for information security management, reinforcing its commitment to consumer data protection [11] Group 3: Financial Consumer Education - The company has developed an efficient financial education system that engages consumers at various levels, promoting financial knowledge and consumer protection concepts [14] - Monthly themed consumer protection days are planned for 2024 to enhance public awareness and engagement [15] Group 4: Dispute Resolution - The company integrates the "Fengqiao Experience" into its claims and complaint management, utilizing digital tools to enhance service efficiency [18] - A comprehensive dispute resolution system has been established, showcasing the company's commitment to resolving conflicts at the source [19] Group 5: Elderly Services - The company focuses on enhancing financial services for the elderly, offering tailored insurance products and services [22] - Various initiatives have been launched to improve service accessibility for older clients, including specialized customer service features [23] Group 6: Online Financial Service Innovation - The launch of the "Palm Service Station" has expanded online service capabilities, integrating various consumer needs into a single platform [29][30] - The service has received positive feedback for its efficiency and user-friendly features [30] Group 7: Impactful Claims Cases - The company effectively managed claims during the Typhoon "Mojia," demonstrating its commitment to rapid response and consumer support [33] - A significant amount of claims, totaling 2.09 billion yuan, was processed quickly, showcasing the company's operational efficiency [33]

Investment Rating - The investment rating for China Pacific Insurance (02328.HK) is "Outperform the Market" [1][2][9]. Core Views - The rapid growth in electric vehicle sales has significantly boosted the demand for electric vehicle insurance, although challenges such as high premiums and underwriting losses persist due to changes in owner demographics, high repair barriers, and insufficient data [2][9]. - China Pacific Insurance is leveraging its market position to build a comprehensive risk protection system for electric vehicles, achieving notable advantages in data reserves, marketing models, product offerings, and claims services [2][9]. - The company expects that as the electric vehicle industry matures and renewal rates improve, the loss ratio will stabilize, positively impacting the overall combined ratio (COR) [2][9]. Summary by Sections Electric Vehicle Insurance Development Status - The number of electric vehicles in China has surged from 1.11 million in 2020 to 7.13 million by September 2024, with a compound annual growth rate (CAGR) of 59% [3]. - China Pacific Insurance has seen a continuous growth in the number of electric vehicle policies, maintaining a growth rate of around 60% from 2020 to 2023, with a compound annual growth rate of premiums at 86.4% from 2021 to 2023, significantly outpacing the industry average [3]. Challenges in Electric Vehicle Insurance - The current claims ratio for electric vehicles is approximately 1.4 times that of traditional fuel vehicles, with occurrence rates about 2.5 times higher, leading to lower underwriting profitability [4][5]. - Factors contributing to high claims include a higher proportion of operational vehicles, a younger customer base with less driving experience, and high repair costs due to limited repair channels and expensive parts [5][6]. Competitive Advantages of China Pacific Insurance - The company has established a specialized team for electric vehicle pricing, utilizing extensive global data to enhance risk identification and pricing strategies [7]. - It has developed a comprehensive service network covering all urban and rural areas in China, ensuring robust post-sale support [7]. - The claims process is optimized through a dedicated team of electric vehicle claims experts and partnerships with over 660 repair facilities [7]. Future Outlook - As the electric vehicle market matures, the loss ratio and claims are expected to improve, aided by increased customer conversion and renewal rates, which will enhance data accumulation for better risk modeling and pricing [8][9].

Investment Rating - The report maintains a "Buy" rating for China Pacific Insurance (02328.HK) [1] Core Views - The report emphasizes the need for a developmental mindset to address the challenges of transforming and upgrading the new energy vehicle insurance sector [3] - It highlights the increasing penetration of new energy vehicles and the expected growth in insurance premiums, projecting that by 2025, the premium scale for new energy vehicle insurance will reach 194.7 billion, accounting for approximately 20.1% of total vehicle insurance premiums [2][3] - The report outlines the company's proactive approach in implementing green insurance innovations and developing a comprehensive risk management model that covers the entire lifecycle of vehicles [3] Summary by Relevant Sections Earnings Forecast and Valuation - Insurance service revenue is projected to grow from 424.4 billion in 2022 to 569.8 billion by 2026, with a compound annual growth rate (CAGR) of approximately 7.5% [1] - The net profit attributable to shareholders is expected to increase from 29.2 billion in 2022 to 34.5 billion by 2026, reflecting a recovery after a decline in 2023 [1] - The return on equity (ROE) is forecasted to stabilize around 12% in the coming years [1] New Energy Vehicle Insurance Insights - The report identifies that the claims ratio for new energy vehicle insurance is significantly higher, approximately 2.5 times that of traditional fuel vehicles, due to factors such as high operational vehicle ratios and a younger customer demographic [2][3] - It notes that the company has achieved underwriting profitability for new energy household commercial insurance as of January to October 2024, indicating a positive trend in the sector [3] Strategic Initiatives - The company is focusing on new products, technologies, and business models to better meet the needs of vehicle owners and adapt to industry trends [3] - The report discusses the company's commitment to enhancing its capabilities in pricing, operations, innovation, and risk management to support the growth of new energy vehicle insurance [3]