Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company's net profit for Q1 2024 was 5.87 billion, a year-on-year decrease of 38.3%. This decline was primarily due to market volatility affecting investment income, which decreased by approximately 35.2% year-on-year. Additionally, natural disasters such as snowstorms and freezing rain, along with increased travel rates, led to a rise in the comprehensive cost ratio to 97.9%, up 2.2 percentage points year-on-year [6][2]. - Despite the short-term impacts of natural disasters and market fluctuations, the company's solid fundamentals and profitability remain intact. The report anticipates improvements in both underwriting profits and investment income, supported by enhanced regulatory oversight of market competition, which is expected to lead to a long-term increase in industry concentration [6][2]. Summary by Sections Financial Performance - In Q1 2024, the company achieved insurance service revenue of 113.84 billion, a year-on-year increase of 5.9%. The revenue from auto insurance was 72.29 billion, up 6.5%, while non-auto insurance revenue was 41.56 billion, growing by 4.9%. The growth rates have slowed compared to 2023, likely due to delays in the selection of certain policy-related businesses [6]. - The total investment income for the company was 4.78 billion, reflecting a year-on-year decline of 35.2%, with an annualized total investment return of only 0.8%. The report notes that the company does not face the liability cost concerns seen in life insurance due to its business model [6]. Solvency and Future Outlook - As of the latest report, the company's core solvency adequacy ratio stood at 228.1%, exceeding both industry peers and regulatory requirements. This strong solvency position provides the company with greater operational flexibility and supports future dividend capabilities [6]. - The report expresses optimism regarding the dual improvement of underwriting profits and investment income, despite the current challenges posed by natural disasters and market volatility [6][2].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 11.90, implying a potential upside of 25.9% from the current price of HKD 9.45 [2][6]. Core Insights - The first quarter performance of the company was below expectations, primarily due to a slight increase in the combined ratio (CoR) to 97.9% from 97.8% in FY23. The growth in automobile and non-automobile premiums slowed down to +1.9% and +5.0% year-on-year, respectively [1][7]. - Despite the weak performance in Q1, the report expresses confidence in the company's underwriting resilience, citing that catastrophe-related claims have been fully released in Q1 and expecting a recovery in monthly premium growth as seasonal effects dissipate [1][6]. - The report adjusts FY24-26E EPS forecasts down by 2%-6% due to ongoing impacts from asset allocation and market volatility, projecting EPS of RMB 1.32, 1.43, and 1.55 for FY24, FY25, and FY26, respectively [1][6]. Financial Performance Summary - The company's net profit for Q1 was RMB 5.87 billion, down 38.3% year-on-year, with underwriting profit declining by 49.1% to RMB 2.35 billion [1][7]. - Insurance service income increased by 5.9% year-on-year to RMB 113.84 billion, while insurance service expenses rose by 9.0% to RMB 105.59 billion [7][8]. - The investment income, including contributions from associates, decreased by 35.7% to RMB 2.15 billion, with a fair value loss of RMB 0.16 billion reported [7][8]. Premium Income and Combined Ratio - The total premium income for Q1 was RMB 173.98 billion, reflecting a year-on-year increase of 3.8% [8]. - The combined ratio for the automobile segment is projected to be 96.7% for FY24, while the non-automobile segment is expected to have a CoR of 98.9% [1][6]. Valuation Metrics - The stock is currently trading at 0.8 times FY24E price-to-book (P/B) ratio, with a dividend yield of 6.0% for FY24E [1][6]. - The report highlights the company's defensive performance, offering over 40% in dividends, and maintains optimism regarding its market leadership in property and casualty insurance [1][6].

Investment Rating - The report maintains a "BUY" rating for PICC P&C with a target price of HK$11.90, implying a 25.9% upside from the current price of HK$9.45 [3][18]. Core Insights - The first quarter of 2024 saw weaker-than-expected results, with the combined ratio (CoR) slightly increasing to 97.9% compared to 97.8% in FY23. Auto and non-auto premium growth dropped to +1.9% and +5.0% YoY, respectively [2]. - Underwriting profit decreased by 49.1% YoY to RMB2.4 billion, impacting net profit which fell by 38.3% YoY to RMB5.9 billion. The net investment yield was reported at 0.8%, lower than some life insurance peers [2][8]. - Despite the weak performance in Q1, the report expresses confidence in the insurer's underwriting resilience due to the full release of catastrophe-induced claims and a recovery in monthly premium growth as seasonal effects fade [2][8]. Summary by Sections Financial Performance - In 1Q24, insurance service revenue increased by 5.9% YoY to RMB113.8 billion, while insurance service expenses rose by 9.0% YoY to RMB105.6 billion. The underwriting result was RMB5.2 billion, down 29.0% YoY [8]. - The net investment result dropped by 53.8% YoY to RMB2.3 billion, with a fair value loss of RMB164 million compared to a gain of RMB1.2 billion in 1Q23 [8][15]. Premium Growth - Auto premium growth was reported at +1.9% YoY, significantly lower than the previous year's +6.5%. Non-auto premium growth was +5.0% YoY, down from +12.8% YoY in 1Q23 [2][9]. - Agriculture insurance premiums increased by 14.7% YoY in March, indicating potential recovery in non-auto segments [2]. Valuation Metrics - The stock is currently trading at 0.8x FY24E P/BV, with a projected dividend yield of 6.0% for FY24E [2][15]. - The report revises down FY24-26E EPS by 2%-6% due to investment volatilities, with expected EPS of RMB1.32, RMB1.43, and RMB1.55 for FY24, FY25, and FY26, respectively [2][15].

Summary of the Conference Call on China Pacific Insurance Company Overview - The conference call focused on **China Pacific Insurance** (中国财险), discussing its recent performance and outlook for the year 2024 [2][3]. Key Points and Arguments Financial Performance - The first quarter results were below market expectations, with a combined cost ratio of **97.9%** and a net profit decline of **38.3%** [4][28]. - Market expectations for the combined cost ratio were around **97.5%**, with a profit decline forecasted between **20% to 25%** [4]. - The underwriting profit was approximately **2.4 billion** (24亿), reflecting a year-on-year decline of **48%** [5]. - Investment income saw a significant drop, with a decline of **35%**, which heavily impacted overall profits since investment income constitutes about **60% to 70%** of total profits [6][28]. Industry Comparison - Compared to competitors, China Pacific Insurance's performance was relatively weaker, with its combined cost ratio significantly lower than that of China Taiping (98.4%) and Ping An (98.7%) [8]. - The company’s performance was affected by a high base from the previous year, where the combined cost ratio was **95.7%** [8]. External Factors - The company faced challenges due to natural disasters, specifically a rare freezing rain event in regions like Hubei and Anhui, which increased claims and impacted profitability [22][24]. - The social insurance business was also sluggish due to slow government tender processes, leading to lower earned premiums [25]. Future Outlook - The company’s president expressed confidence in achieving the annual targets, maintaining a combined cost ratio of **97%** for auto insurance and **100%** for non-auto insurance [18][19]. - The forecast for the full year is a net profit of approximately **27 billion** (270亿), with a year-on-year growth rate of about **10%** [28]. - The expected dividend growth is projected to be between **5% to 10%**, with a target of around **0.108** (0.10) per share [28]. Investment Perspective - The current valuation is seen as attractive, with a price-to-book ratio of **0.78** and a dividend yield of around **6%** [34]. - The analysis suggests that the first quarter results represent a low point, with expectations for recovery in subsequent quarters, particularly in Q3 and Q4 [32][37]. Conclusion - The overall sentiment remains optimistic regarding the company's long-term investment value, despite short-term fluctuations due to external factors and accounting changes [39]. Additional Important Points - The impact of new accounting standards on financial reporting was noted, affecting the classification of assets and the recognition of gains [10][12]. - The company’s investment strategy and performance in the bond market were discussed, highlighting the shorter duration of liabilities compared to competitors [12][13]. This summary encapsulates the key insights from the conference call regarding China Pacific Insurance's financial performance, industry positioning, external challenges, and future outlook.

Investment Rating - The report maintains a "Buy" rating with a target price of HKD 13.35 per share, corresponding to a P/B of 1.2 times for 2024 [3][4]. Core Views - The company's net profit for Q1 2024 decreased by 38.3% year-on-year to CNY 5.871 billion, which is below market expectations. Both underwriting and investment are under pressure, with the combined cost ratio (COR) rising to 97.9%, an increase of 2.2 percentage points year-on-year [3][4]. - The report anticipates that the company will achieve stable premium growth through intrinsic development despite the challenges faced in underwriting and investment [3]. Summary by Sections Financial Performance - Q1 2024 net profit was CNY 5.871 billion, down 38.3% year-on-year, lower than market expectations. The underwriting profit has significantly declined due to adverse weather conditions and increased traffic, while investment income has also been affected by market volatility [3][7]. - The total investment return rate (not annualized) was 0.8%, while the comprehensive investment return rate (not annualized) remained stable at 1.49% [3]. Underwriting Performance - Q1 2024 auto insurance premium growth was 1.9%, below the industry growth rate of 2.6%. This is attributed to the relaxation of self-pricing mechanisms and strict adherence to the "reporting and execution" policy [3]. - The report projects that auto insurance will see intrinsic growth, with 31% of customers only holding mandatory insurance and 87% holding only mandatory insurance plus CNY 1 million in commercial third-party liability insurance, potentially leading to an annual premium growth of 0.5% to 1.0% [3]. Non-Auto Insurance - Q1 2024 non-auto insurance premium income grew by 5.0%, primarily driven by corporate property insurance, cargo insurance, and health insurance, which contributed 11.3%, 9.4%, and 6.2% respectively [3]. - The report highlights that the growth in agricultural insurance has slowed to 3.2% year-on-year due to delays in selection processes in some regions [3]. Future Outlook - The company aims to maintain its underwriting profit target for the year, with a target COR of 97% for auto insurance and 100% for non-auto insurance [3]. - The report identifies catalysts for future growth, including effective claims control mechanisms [3].

Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Views - The company's net profit for Q1 2024 was 5.871 billion yuan, a year-on-year decrease of 38.3%. The combined ratio (COR) increased by 2.2 percentage points to 97.9%, which is below expectations but still better than peers [2][4]. - The insurance service revenue for Q1 2024 was 113.843 billion yuan, reflecting a year-on-year growth of 5.9%. However, the underwriting profit decreased by 48.3% to 2.391 billion yuan due to increased claims from natural disasters and traffic incidents [2][4]. - The company is expected to maintain a stable business operation with a focus on optimizing structure, reducing costs, and managing risks, which should lead to long-term improvement in COR [2][4]. Financial Data and Earnings Forecast - Insurance service revenue is projected to grow from 424.355 billion yuan in 2024E to 552.869 billion yuan in 2026E, with a compound annual growth rate (CAGR) of approximately 7.5% [2][6]. - Net profit is expected to recover from 24.585 billion yuan in 2023E to 35.951 billion yuan in 2026E, with a notable year-on-year growth of 16.1% in 2024E [2][6]. - Earnings per share (EPS) is forecasted to increase from 1.11 yuan in 2023E to 1.62 yuan in 2026E, indicating a positive trend in profitability [2][6]. - The price-to-earnings (P/E) ratio is projected to decrease from 8.20 in 2024E to 5.60 in 2026E, suggesting an attractive valuation [2][6]. Market Performance - As of April 29, 2024, the closing price of the company's stock was 9.98 HKD, with a market capitalization of 222 billion HKD [1]. - The stock has a 52-week high of 11.28 HKD and a low of 8.17 HKD, indicating some volatility in its trading range [1].

Investment Rating - The report maintains a "Buy" rating for China Pacific Insurance (02328) with a target price of HKD 13.00, based on its unique business model and high return on equity (ROE) [5][6]. Core Views - The company reported a net profit of HKD 5.871 billion in Q1 2024, a year-on-year decrease of 38.3%, primarily due to declines in both underwriting profit and investment income [4][5]. - The overall combined ratio (COR) for Q1 2024 was 97.9%, an increase of 2.2 percentage points year-on-year, attributed to heightened claims from natural disasters and increased payout ratios due to the recovery of automobile travel [3][4]. - The report anticipates gradual improvement in performance throughout the year, driven by economic recovery and seasonal factors, with expectations of single-digit growth in premium income [3][5]. Financial Performance Summary - In Q1 2024, the company achieved original insurance premium income of HKD 173.977 billion, a year-on-year increase of 3.8%, with motor insurance premiums up 1.9% and non-motor insurance premiums up 5.0% [3]. - The annualized total investment return rate for Q1 2024 was 3.2%, with total investment income of approximately HKD 4.892 billion, down 34.7% year-on-year due to market volatility affecting equity investments [4]. - The projected net profits for 2024-2026 are estimated at HKD 28.244 billion, HKD 31.365 billion, and HKD 33.301 billion, reflecting growth rates of 15%, 11%, and 6% respectively [5][6]. Financial Data and Valuation - The company's main revenue for 2024 is projected at HKD 482.705 billion, with a year-on-year growth of 5.6% [6]. - The estimated price-to-earnings (PE) ratio for 2024 is 6.91, with a price-to-book (PB) ratio of 0.92 [6]. - The total assets are expected to reach HKD 746.462 billion by 2024, with total liabilities projected at HKD 495.323 billion [11].

Investment Rating - The investment rating for China Pacific Insurance (02328.HK) is "Buy" (maintained) [1][2] Core Views - The report highlights that the company's net profit for Q1 2024 was 5.871 billion yuan, a significant decline of 38.3% year-on-year, which was below expectations. This decline is attributed to challenges in underwriting due to adverse weather conditions and increased travel, as well as fluctuations in capital markets affecting investment income [2][5] - The report indicates that the high base from the previous year is a core factor dragging down the Return on Equity (ROE), which was 2.5% in Q1 2024, a decrease of 1.8 percentage points year-on-year [2][5] - Despite the challenges, the company is noted to have certain resilience compared to its peers, with absolute performance levels still superior to the industry [2][5] Summary by Relevant Sections Earnings Forecast and Valuation - Insurance service revenue is projected to grow from 457.203 billion yuan in 2023 to 569.764 billion yuan by 2026, with a compound annual growth rate (CAGR) of approximately 7.5% [1][7] - The net profit attributable to shareholders is expected to increase from 24.585 billion yuan in 2023 to 34.478 billion yuan in 2026, reflecting a CAGR of about 9.1% [1][7] - The report maintains the profit forecast for 2024-2026, estimating net profits of 29.641 billion yuan, 32.330 billion yuan, and 34.478 billion yuan respectively [2][5] Performance Analysis - The average underwriting leverage remained stable at 0.48 in Q1 2024, with insurance service revenue growth of 5.9% slightly outpacing equity growth of 5.3% [2][5] - The underwriting profit margin decreased from 4.3% in Q1 2023 to 2.1% in Q1 2024, primarily due to increased claims from adverse weather events [2][5] - The total investment return rate fell from 1.3% in Q1 2023 to 0.8% in Q1 2024, with investment income declining by 36.4% year-on-year [2][5] Competitive Positioning - The report compares the company's performance with its peers, noting that its comprehensive cost ratio of 97.9% in Q1 2024 is better than that of its competitors [2][5] - In terms of original premium growth for Q1 2024, the company is positioned behind its peers, with a focus on upgrading business quality and moderating premium growth in the auto insurance segment [2][5]

Investment Rating - The report maintains a "Recommended" rating for China Pacific Insurance (02328.HK) with a target price of HKD 13.51, compared to the current price of HKD 9.98 [1][2]. Core Insights - The company reported a 5.9% year-on-year increase in insurance service revenue for Q1 2024, reaching CNY 113.8 billion. The combined cost ratio (COR) rose by 2.2 percentage points to 97.9%, but remains better than peers. The net profit decreased by 38.3% year-on-year to CNY 5.9 billion, primarily due to investment performance [1][2]. - The company is expected to maintain steady growth in underwriting, supported by its leading position and a new business model integrating "insurance + risk reduction services + technology." The report anticipates a gradual improvement in return on equity (ROE) [2][3]. Financial Performance Summary - For Q1 2024, the company achieved insurance service revenue of CNY 113.8 billion, a year-on-year increase of 5.9%. The COR was 97.9%, which is better than major competitors [1][2]. - The investment performance was impacted by a high base from the previous year, with a total investment yield of 0.8% for Q1 2024. The net profit was affected by a significant decline in investment income, with total investment income decreasing by 36.4% year-on-year [2][3]. - The report projects the company's earnings per share (EPS) for 2024-2026 to be CNY 1.37, CNY 1.54, and CNY 1.70 respectively, with a price-to-book (PB) target of 1.1x for 2024 [2][3].

非银金融/保险Ⅱ 公 司 中国财险（02328.HK） 冰冻灾害和高出行拖累 COR，政策端释放积极信号 研 究 2024年04月30日 ——中国财险 2024年 1季报点评 投资评级：买入（维持） 高超（分析师） 吕晨雨（分析师） 唐关勇（联系人） 日期 2024/4/30 gaochao1@kysec.cn lvchenyu@kysec.cn tangguanyong@kysec.cn 当前股价(港元) 9.980 证 书编号：S0790520050001 证书编号：S0790522090002 证书编号：S0790123070030 一年最高最低(港元) 11.540/8.030  冰冻灾害和高出行拖累COR，高基数下权益投资下滑拖累业绩 总市值(亿港元) 2,219.83 公司披露 2024年1季报，2024Q1归母净利润58.71亿元、同比-38.3%，低于我 流通市值(亿港元) 688.55 们预期，我们测算承保/投资利润分别同比-32%/-53%，预计主要系春季雪灾多 港 总股本(亿股) 222.43 发和出行率提升造成 COR提高，同时权益投资收益下滑。公司承保综合成本率 股 流通港股(亿股 ...