Investment Rating - The report maintains a "Buy" rating for ZhongAn Online (06060.HK) with a target price of HKD 23.28, while the current price is HKD 14.58 [1]. Core Views - The successful completion of a USD 35 million Series A financing for ZA Tech, now renamed Peak3, highlights the market's recognition of its business model and growth potential [1]. - ZhongAn Online is a leading internet insurance company with a solid foundation for profitability, as evidenced by a total premium income of CNY 29.501 billion in 2023, reflecting a year-on-year increase of 24.7% [1]. - The company is focusing on building a second growth curve through its technology and banking segments, with expectations of gradually achieving breakeven [1][2]. Summary by Sections Financing and Business Development - ZA Tech's financing round led by EQT and the recognition of its business model indicate strong market confidence [1]. - The restructuring of ZhongAn International allows for greater flexibility and autonomy in financing and business development [1]. Insurance Business Performance - In 2023, ZhongAn Online's total premium income reached CNY 29.501 billion, with insurance service revenue of CNY 27.521 billion, both showing significant year-on-year growth [1]. - The four major insurance segments—Healthy Ecosystem, Digital Life, Consumer Finance, and Automotive Ecosystem—reported premium income of CNY 9.806 billion, CNY 12.563 billion, CNY 5.551 billion, and CNY 1.580 billion, respectively, with growth rates of 9.2%, 41.6%, 22.5%, and 24.7% [1]. Technology and Banking Segments - ZA Tech operates a light-asset model in the insurance technology sector, generating CNY 325 million in revenue in 2023, with a gross margin of 46% [1]. - ZA Bank, as one of Hong Kong's first virtual banks, has achieved a deposit balance exceeding HKD 10 billion, with a loan-to-deposit ratio of 46.4% [2]. - The bank's net interest margin improved from 1.84% in 2022 to 1.94% in 2023, indicating enhanced asset quality and operational efficiency [2]. Future Outlook - The report anticipates that the self-operated channel construction and business structure optimization will continue to drive performance in the insurance segments [1]. - The technology and banking segments are expected to create a second growth curve, with gradual improvements in key performance indicators [2].

Financial Performance - Total premiums for 2023 reached RMB 29,684.639 million, a 24.7% increase from RMB 23,651 million in 2022[2] - Net profit attributable to shareholders for 2023 was RMB 4,077.855 million, compared to a loss of RMB 1,112.414 million in 2022[2] - Total insurance service revenue for 2023 reached RMB 27.54 billion, a 24.7% increase from RMB 22.19 billion in 2022[35] - Investment income net amount for 2023 was RMB 4.19 billion, a significant increase from RMB 1.76 billion in 2022[35] - Total revenue for the year ended December 31, 2023, reached approximately RMB 33.54 billion, a year-on-year increase of 44.2%[99] - The company recorded a net profit of approximately RMB 3.84 billion for the year ended December 31, 2023, compared to a net loss of about RMB 1.38 billion for the year ended December 31, 2022[120] Assets and Liabilities - The total assets as of December 31, 2023, amounted to RMB 42,863.606 million, down from RMB 47,648.878 million in 2022[2] - The total liabilities decreased to RMB 22,790.183 million in 2023 from RMB 30,033.758 million in 2022[2] - The total equity attributable to shareholders increased by 27.3% to RMB 20,073.423 million in 2023 from RMB 15,766.090 million in 2022[5] - The company's asset-liability ratio decreased by 9.8 percentage points to approximately 53.2% as of December 31, 2023, from about 63.0% as of December 31, 2022[129] Premiums by Ecosystem - Total premium for the health ecosystem reached 9.806 billion yuan in 2023, providing health coverage for over 125 million insured users[14] - The digital lifestyle ecosystem's total premium exceeded 12.563 billion yuan in 2023, a year-on-year growth of 41.6%[15] - The consumer finance ecosystem's total premium reached 5.551 billion yuan in 2023, with a year-on-year increase of 22.5%[16] - The auto insurance ecosystem's total premium was 1.58 billion yuan in 2023, growing by 24.7% year-on-year, significantly above the industry average[17] Technology and Innovation - The company aims to continue leveraging technology to enhance user experience and drive sustainable growth[12] - The company plans to focus on technology-driven innovation and high-quality service to create greater value for users and investors[10] - R&D investment amounted to 1.192 billion yuan in 2023, representing 4.0% of total premiums, enhancing technological capabilities[19] - The company launched the first AIGC (Generative AI Technology) application white paper in the domestic insurance industry in May 2023[26] - The company has filed a total of 588 patent applications, including 167 overseas, with 199 patents granted, a year-on-year increase of 19.9%[61] Market Position and Recognition - The company ranked ninth in China's property insurance industry by total premiums, with a market share of 24.4% in the domestic internet property insurance market, the highest in the sector[30] - The company was included in the "2023 China Top 500" list by Fortune magazine, marking its first appearance and recognition as the only insurtech company on the list[30] Governance and Management - The company has a diverse management team with extensive experience in finance and technology sectors[138] - The board of directors consists of 2 executive directors, 5 non-executive directors, and 3 independent non-executive directors, ensuring a balanced governance structure[157] - The company has adopted corporate governance codes to enhance transparency and accountability to shareholders and clients[155][156] - The management team has extensive experience in the insurance industry, contributing to informed decision-making and strategic planning[147][148][149] Risk Management - The company faces foreign exchange risks due to operations primarily in China, with assets and liabilities denominated in various foreign currencies[130] - The company emphasizes the importance of risk management strategies and has provided independent reviews to ensure alignment with overall business objectives[186] Employee and Compensation - The company has 2,679 full-time employees as of December 31, 2023, with numbers fluctuating based on business needs[134] - The total employee benefits cost, including directors and supervisors' remuneration, amounted to RMB 2.317 billion[134] Future Outlook - The company plans to continue focusing on the "insurance + technology" dual-engine strategy to enhance brand building and optimize underwriting efficiency[98] - The company aims to maintain a gender diversity ratio of at least 41.4% female employees, with a total workforce of 2,679[194]

Investment Rating - The report assigns an "Accumulate" rating for ZhongAn Online (06060) with a target price based on the closing price of 12.54 on April 12, 2024 [1]. Core Insights - ZhongAn Online's 2023 annual report shows a total premium of 29.685 billion, a year-on-year increase of 23.7%, and an insurance service revenue of 27.535 billion, up 24.1%. The net profit attributable to shareholders was 4.079 billion, turning positive after excluding a one-time gain from the conversion of ZhongAn International to an associate [2][3]. - The company is focusing on the synergy of its four ecosystems: health, digital life, consumer finance, and automotive, which contributed to the premium growth [2][3]. - The report anticipates revenue growth for 2024-2026 to be 33.070 billion, 38.626 billion, and 44.690 billion respectively, with net profits expected to be 0.854 billion, 1.079 billion, and 1.324 billion respectively [3]. Summary by Sections Premium and Revenue Growth - Total premium reached 29.685 billion, with significant contributions from digital life (12.563 billion, +41.6%) and consumer finance (5.551 billion, +22.5%) [2]. - Health ecosystem premiums were 9.806 billion (+9.2%), while automotive premiums were 1.580 billion (+24.7%) [2]. Profitability Metrics - The comprehensive loss ratio (COR) for health was 87.2%, digital life was 99.5%, consumer finance was 96.4%, and automotive was 95.4% [2]. - The net profit margin showed a significant increase, with net profit growth of 466.58% in 2023, although a decline is expected in 2024 [3]. Investment Performance - The investment portfolio saw a total investment income of 720 million, turning positive from a loss, primarily due to fair value changes [2]. - The company increased its bond investments significantly, with a 42.0% year-on-year increase to 18.436 billion [2]. Future Projections - Earnings per share (EPS) are projected to be 0.58, 0.73, and 0.90 for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings (PE) ratios of 19.93x, 15.78x, and 12.86x [3].

Investment Rating - The report maintains a "Buy" rating for ZhongAn Online (06060.HK) with a target price of HKD 23.73, compared to the current price of HKD 13.68 [2][4]. Core Insights - In 2023, ZhongAn Online achieved a net profit attributable to shareholders of CNY 4.078 billion, marking a turnaround from losses; the total equity attributable to shareholders reached CNY 20.073 billion, up 27.3% year-on-year [2][4]. - The company reported premium income of CNY 29.501 billion, an increase of 24.7% year-on-year, with a combined cost ratio of 95.2%, up 1.0 percentage points [2][4]. - The net and total investment returns were 2.2% and 1.9%, respectively, with a decrease of 1.0 percentage points in net returns but an increase of 2.9 percentage points in total returns [2][4]. Summary by Sections Business Performance - The self-operated channel's total premium reached CNY 7.614 billion, growing by 31.0% year-on-year, accounting for 25.8% of total premiums, up 1.3 percentage points [2]. - The health ecosystem generated premium income of CNY 9.806 billion, a 9.2% increase, with significant growth in critical illness and outpatient insurance, at 130.6% and 157.3%, respectively [2]. - The digital life ecosystem saw premium income of CNY 12.563 billion, up 41.6%, driven by e-commerce and travel insurance, with the latter growing by 89.0% [2]. Financial Performance - The company’s total investment assets reached CNY 38.204 billion, a 4.6% increase year-on-year, with a focus on fixed income investments, which accounted for 75% of the portfolio [4]. - The bank segment, ZA Bank, reported net income of HKD 366 million, a 42.9% increase, with a loan-to-deposit ratio improvement and a net interest margin of 1.94% [4]. Future Outlook - The report anticipates continued growth in the insurance segment driven by the self-operated channel, while the technology and banking segments are expected to improve, potentially creating a second growth curve for the company [4][5]. - The earnings per share (EPS) estimates for 2024-2026 have been adjusted to CNY 0.8, 1.0, and 1.2, respectively, reflecting the impact of a one-time income from the sale of ZhongAn International in 2023 [4][5].

Investment Rating - The report maintains a "Buy" rating for the company with a current price of HKD 12.5 [2] Core Insights - The company achieved a significant turnaround in profitability, reporting a net profit of HKD 4.08 billion in 2023, compared to a loss of HKD 1.11 billion in 2022 [4][5] - Total premium income increased by 24.7% year-on-year to HKD 29.5 billion, driven by growth across all four business segments [5][6] - The company’s investment income improved significantly, with a total investment return rate of 2.7%, up by 2.9 percentage points year-on-year [5] Summary by Sections Revenue Performance - In 2023, the company reported total revenue of HKD 33.54 billion, a year-on-year increase of 44.2% [4] - Insurance service revenue reached HKD 27.54 billion, growing by 24.1% year-on-year [4] Profitability - The company turned a profit with a net profit of HKD 4.08 billion in 2023, compared to a loss of HKD 1.11 billion in 2022 [5] - The underwriting profit for the domestic segment was HKD 1.31 billion, reflecting a year-on-year increase of 1.7% [4] Investment Performance - The net investment return rate was 2.2%, down by 1.1 percentage points year-on-year, while the total investment return rate was 2.7%, up by 2.9 percentage points [5] - The domestic insurance segment's total investment income turned positive, reaching HKD 720 million, compared to a loss of HKD 380 million in 2022 [5] Premium Growth - Total premium income was HKD 29.5 billion, with the first half of 2023 showing a growth of 37.5% and the second half at 14.5% [5] - The health segment generated HKD 9.81 billion in premium income, up 9.2% year-on-year, while the digital life segment saw a 41.6% increase to HKD 12.56 billion [6] Self-operated Channels - The self-operated channels contributed HKD 7.61 billion in premium income, a year-on-year increase of 31.0%, accounting for 25.8% of total premiums [7] Research and Development - R&D investment decreased by 11.4% year-on-year to HKD 1.19 billion, representing 4.0% of total premiums [7] - Revenue from technology output increased by 40.0% year-on-year to HKD 830 million [7] Future Outlook - The company is expected to maintain its growth trajectory, with projected net profits of HKD 1.1 billion, HKD 1.3 billion, and HKD 1.5 billion for 2024, 2025, and 2026 respectively [7]

Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to the market [3][4]. Core Insights - The company achieved a net profit of 4.08 billion RMB in 2023, recovering from a loss of 1.11 billion RMB in 2022. After adjustments related to the transition of a subsidiary to an associate, the adjusted net profit stands at 290 million RMB [2][4]. - The insurance segment turned profitable, while the banking segment's losses narrowed. The net profits for the insurance, technology, and banking segments in 2023 were 550 million RMB, -470 million RMB, and -280 million RMB, respectively [2][4]. - Total premiums reached 29.5 billion RMB, reflecting a year-on-year growth of 24.7%. The health, digital life, consumer finance, and automotive segments saw premium growth rates of 9%, 42%, 23%, and 25%, respectively [2][4][7]. - The comprehensive cost ratio improved to 95.2%, with a claims ratio of 56.8% and an expense ratio of 38.4% [2][4][8]. Financial Performance Summary - Insurance service revenue is projected to grow from 27.54 billion RMB in 2023 to 39.71 billion RMB by 2026, with a year-on-year growth rate of 24.09% in 2023 [4][10]. - The net profit is expected to decline significantly by 90.1% in 2024, followed by a recovery in subsequent years, reaching 712 million RMB by 2026 [4][10]. - The earnings per share (EPS) is forecasted to be 2.77 RMB in 2023, dropping to 0.28 RMB in 2024, and gradually increasing thereafter [4][10]. Valuation Metrics - The report assigns a comparable company valuation multiple of 1.29x to 1.36x for the 2024E price-to-book (PB) ratio, suggesting a reasonable value range of 18.26 RMB to 19.23 RMB, equivalent to 20.13 HKD to 21.20 HKD [2][4][6]. - The current stock price corresponds to a valuation of 0.8x PB for 2024E, indicating potential upside [2][4].

Investment Rating - Maintain BUY with a new target price of HK$22.0 [2][6] Core Viewpoints - ZhongAn reported a significant turnaround in FY23, with net profit attributable to shareholders reaching RMB4.1bn, compared to a net loss of RMB1.1bn in FY22 [2] - Excluding the one-off gain from the disposal of ZA International (RMB3.78bn), the insurer recorded a net profit of RMB294mn, in line with consensus [2] - The company's growth is driven by its digital lifestyle ecosystem, technology export, and ZA Bank's breakeven progress [2][6] Domestic P&C Insurance - Domestic P&C insurance premiums grew by 33.1% YoY in 2H23, driven by digital lifestyle-related products such as e-commerce cargo insurance, travel insurance, and pet insurance [2] - The underwriting combined ratio (CoR) rose 1.0ppt to 95.2% in 2023, but underwriting profit (UWP) increased by 1.7% YoY to RMB1.3bn due to higher insurance revenue (+24.2% YoY) [2] - The health segment saw a 130.6% YoY increase in gross written premiums (GWP) for critical illness insurance, reaching RMB1.3bn in 2023 [2] Technology Export - Revenue from domestic technology export surged 73% YoY to RMB504mn in 2023, benefiting from the Digital China initiative [2] ZA Bank Performance - ZA Bank's net revenue increased by 42.9% YoY to RMB366mn in 2023, with a net interest margin (NIM) expansion of 10bps to 1.94% [2] - The bank launched US-stock trading in January 2024, which is expected to attract tech-savvy customers and improve retention [2] Proprietary Channels - Premiums from proprietary channels grew 31.0% YoY to RMB7.6bn, accounting for 26% of total GWP [2] - In the Health ecosystem, GWP from proprietary channels increased by 45.0% YoY to RMB4.4bn, representing 44.5% of total Health GWP [2] - The number of paid customers rose 14.8% to 11.43mn, with premiums per user increasing by 14.4% YoY to RMB670 [2] Financial Projections - FY24-26E net profit is projected at RMB434mn, RMB547mn, and RMB678mn, respectively [3] - The underwriting combined ratio (CoR) is expected to remain stable at 95.8%/96.0%/96.0% for FY24-26E, with underwriting profits projected at RMB1.38bn/RMB1.56bn/RMB1.77bn [6] Valuation - The stock is trading at FY24E 0.9x P/B and FY24E 0.5x P/S [5] - The fair value is based on a FY24E P/B of 1.46x, implying a 20-year growth rate of 8% [6]

Investment Rating - Maintain "Overweight" rating with a target price of HKD 29.88 per share, corresponding to a 2024 P/B of 2.0x [3] Core Views - The company achieved a turnaround in 2023 with adjusted net profit attributable to shareholders of RMB 294 million, driven by improved investment returns [3] - Premium income grew rapidly, with underwriting profitability remaining stable [3] - Technology output expanded rapidly, and the virtual bank further reduced losses [3] Financial Performance - 2023 net profit attributable to shareholders was RMB 4.078 billion, including a one-time investment gain of RMB 3.784 billion from the conversion of ZhongAn International to a joint venture [3] - Adjusted net profit attributable to shareholders was RMB 294 million, achieving a turnaround due to three factors: 1) slight improvement in underwriting profitability, 2) significant improvement in investment returns, and 3) better exchange rate gains [3] - 2023 premium income reached RMB 29.501 billion, up 24.7% YoY, driven by digital life and health ecosystems [3] - 2023 investment income was RMB 4.961 billion, with adjusted investment income of RMB 1.177 billion, turning from a loss to a profit YoY [3] Business Segments Health Ecosystem - Premium income increased by 9.2% YoY to RMB 9.806 billion, driven by a 23.6% increase in paying users [3] - New premium contribution reached 52%, up 10 percentage points YoY [3] - Underwriting combined ratio improved by 1.4 percentage points to 87.2% [3] Digital Life Ecosystem - Premium income surged 41.6% YoY to RMB 12.563 billion, mainly driven by e-commerce return insurance and travel business [3] - Underwriting combined ratio remained flat at 99.5% [3] Consumer Finance Ecosystem - Premium income grew 22.5% YoY to RMB 5.551 billion [3] - Underwriting combined ratio increased by 6.5 percentage points to 96.4% due to external environmental impacts [3] Auto Ecosystem - Premium income rose 24.7% YoY to RMB 1.580 billion, with new energy vehicle premiums surging 196.1% [3] - Underwriting combined ratio improved by 2.0 percentage points to 97.4% due to significant compression in expense ratio [3] Technology Output and Virtual Bank - Technology output revenue reached RMB 829 million, up 40.0% YoY, with 101 new insurance industry chain clients and 12 new bank and securities clients [3] - ZhongAn Bank's net revenue was HKD 366 million, up 42.9% YoY, with net loss ratio narrowing by 85.6 percentage points to 109.1% [3] Market Data - Current share price: HKD 11.92 [4] - 52-week price range: HKD 11.50-26.55 [5] - Current market capitalization: HKD 17.520 billion [5]

Investment Rating - The report maintains a "Buy" rating for ZhongAn Online (06060 HK) [1][4] Core Views - ZhongAn Online has achieved a turnaround from loss to profit through its "insurance + technology" dual-engine strategy [1] - The company's total premium income reached 29 501 billion yuan in 2023, a year-on-year increase of 24 7% [1] - Net profit attributable to the parent company was 4 078 billion yuan, marking a significant improvement from the previous year [1] - The comprehensive cost ratio improved to 95 2%, down by 1 0 percentage points year-on-year [1] - The company's self-operated channels achieved total premium income of 7 614 billion yuan, up 31 0% year-on-year [1] - ZA Bank, a subsidiary, has shown positive indicators with its interest margin increasing from 1 84% in 2022 to 1 94% in 2023 [1] Business Performance and Strategy - ZhongAn Online has built a diversified product matrix across four ecosystems: health, digital life, consumer finance, and automotive [1] - Health insurance premium income grew by 9 2%, with the "Million Medical" product contributing 6 515 billion yuan [1] - Digital life insurance premium income increased by 41 6%, driven by customized services for e-commerce and travel sectors [1] - Consumer finance premium income rose by 22 5%, with a focus on high-quality small-amount customers [1] - Automotive insurance premium income grew by 24 7%, with new energy vehicle insurance surging by 196% [1] - The company's technology output revenue reached 829 million yuan, up 40% year-on-year [1] - ZA Bank launched US stock trading services in February 2024, expanding its financial service offerings [1] Financial Forecasts - The report raises earnings forecasts for 2024 and 2025, and introduces a new forecast for 2026 [1] - Expected EPS for 2024-2026: 0 63/1 10/1 29 yuan per share [1] - Corresponding PB ratios: 0 82/0 77/0 75 times [1] - Revenue is projected to grow from 32 143 billion yuan in 2024E to 36 374 billion yuan in 2026E [2] - Net profit attributable to the parent company is expected to increase from 855 million yuan in 2024E to 1 761 billion yuan in 2026E [2] Market Position - ZhongAn Online maintains its leading position in the internet property insurance market [1] - The company's pet insurance business ranks at the top of the industry, with a cumulative transaction volume of 500 million yuan and a growth rate of 150% [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][5] Core Views - The company has achieved underwriting profitability for three consecutive years, with premium growth expected to continue due to its innovative capabilities [5][6] - The 2023 annual report shows a net profit attributable to shareholders of 4.08 billion HKD, a significant turnaround from a loss, primarily driven by a one-time gain from the sale of a subsidiary [5] - The company’s premium income reached 29.5 billion HKD in 2023, reflecting a year-on-year increase of 24.7% [5] Financial Performance Summary - The total investment return rate improved to 1.9% in 2023, up by 2.9 percentage points from 2022 [5] - The underwriting combined ratio was 95.2%, an increase of 1.0 percentage point year-on-year, with underwriting profit of 1.19 billion HKD [5] - The company has adjusted its net profit forecasts for 2024-2025 to 1.12 billion HKD and 1.37 billion HKD, respectively, with a new forecast for 2026 set at 1.65 billion HKD [5][7] Premium Income Breakdown - The company’s four major ecosystems showed strong premium income growth: - Health ecosystem: 9.81 billion HKD, +9.2% YoY - Digital life ecosystem: 12.56 billion HKD, +41.6% YoY - Consumer finance ecosystem: 5.55 billion HKD, +22.5% YoY - Automotive ecosystem: 1.58 billion HKD, +24.7% YoY [6] - The digital life ecosystem benefited from macroeconomic recovery, with e-commerce and travel segments showing significant growth [6] Technology and Banking Developments - The company’s technology output revenue reached 830 million HKD in 2023, a 40% increase YoY, with a total of 848 clients served [6] - ZA Bank, the company’s virtual bank, reported a deposit balance exceeding 11.7 billion HKD, enhancing its product offerings and revenue generation capabilities [6]