Investment Rating - The report maintains an "Accumulate" rating and lowers the target price to HKD 22.34 per share, corresponding to a P/B of 1.6 times for 2024 [5]. Core Views - The company's net profit attributable to shareholders for the first half of 2024 decreased by 75.0% year-on-year, impacted by declines in both underwriting and investment income [4][5]. - The main driver for premium growth is the digital life segment, while the company is actively reducing its consumer finance business due to profitability concerns [5]. Summary by Sections Financial Performance - For 24H1, the net profit attributable to shareholders was RMB 0.55 billion, down 75.0% year-on-year, affected by a decline in underwriting profit and investment income [5]. - Underwriting profit was RMB 3.1 billion, down 39.9% year-on-year, with a combined ratio of 97.9%, an increase of 2.1 percentage points, primarily due to a rise in the loss ratio to 60.7% [5][12]. - Investment income for 24H1 was RMB 6.2 billion, down 14.2% year-on-year, mainly due to fluctuations in the equity market [5][12]. Premium Income Breakdown - Total premium income for 24H1 was RMB 152.38 billion, an increase of 5.4% year-on-year [5][12]. - The health ecosystem premium income was RMB 45.4 billion, down 9.6% year-on-year, while the digital life ecosystem saw premium income of RMB 74.1 billion, up 27.0% year-on-year [5][12]. - The consumer finance ecosystem reported premium income of RMB 21.84 billion, down 21.6% year-on-year, reflecting a strategic contraction in business scale [5][12]. Technology and Banking Performance - Technology output revenue grew by 65.5% year-on-year to RMB 4.42 billion, driven by an increase in domestic clients and overseas digital transformation needs [5][12]. - The virtual bank's net income was HKD 2.55 billion, up 45.9% year-on-year, with the net loss rate narrowing to 42.9% [5][12]. Market Outlook - The report suggests that a recovery in the capital market could act as a catalyst for future performance [5].

众安在线（06060.HK） 优于大市 多元业务共振，盈利态势延续 | --- | --- | --- | --- | --- | --- | |----------------------------------------|----------|----------|---------|--------|--------| | 盈利预测和财务指标 | | 2023 | 2024E | 2025E | 2026E | | 营业收入(百万元) | 23,352 | 7,441 | 32,143 | 34,393 | 36,374 | | (+/-%) | 6.43% | -68.13% | 331.95% | 7.00% | 5.76% | | 归母净利润(百万元) | -1,356 | 4,078 | 855 | 1,501 | 1,761 | | (+/-%) | -216.44% | -400.71% | -79.04% | 75.62% | 17.33% | | 摊薄每股收益(元) | -0.92 | 2.77 | 0.63 | 1.10 | 1.29 | | PB | 1.09 | 0.92 | 0 ...

Financial Performance - In the first half of 2024, the company achieved total premiums of RMB 15.238 billion, issuing 9.133 billion policies, with insurance service revenue of RMB 15.088 billion, representing a year-on-year growth of 19.0%[12]. - The net profit attributable to the parent company shareholders for the first half of 2024 was RMB 55,467 thousand, a decrease of RMB 166,000 thousand from RMB 221,471 thousand in the same period last year[21]. - Total revenue for the first half of 2024 reached approximately RMB 16.04 billion, reflecting a year-on-year growth of 12.7%[75]. - The company reported a total comprehensive income of RMB 163,231 thousand for the first half of 2024, compared to RMB 207,565 thousand in the same period of 2023, a decline of about 21.4%[142]. - The company’s insurance service performance showed a profit of RMB 346,486 thousand for the first half of 2024, down from RMB 581,241 thousand in the same period of 2023[159]. Underwriting and Loss Ratios - The company's underwriting combined cost ratio was 97.9%, with a combined loss ratio of 60.7% and a combined expense ratio of 37.2%, resulting in an underwriting profit of RMB 314 million[13]. - The underwriting profit was impacted by a 3.6 percentage point increase in the combined loss ratio compared to the same period last year[13]. - The combined loss ratio for the health segment increased to 95.7% in 2024 from 92.5% in 2023, indicating a rise in underwriting costs[24]. - The overall combined loss ratio for the consumer finance segment increased to 99.1% in 2024 from 90.7% in 2023, indicating challenges in underwriting profitability[24]. Technology and Innovation - The company aims to leverage its technology capabilities to support the digital transformation of the insurance industry globally[11]. - The technology output business segment generated total revenue of RMB 442 million, a year-on-year increase of 65.5%, with domestic technology output revenue reaching RMB 319 million, growing by 112.7%[13]. - The company focuses on technology output in artificial intelligence, big data, and cloud computing, providing digital transformation solutions for clients in the insurance industry[50]. - The new generation core system "Wujieshan Mate" has empowered multiple insurance companies, improving operational efficiency and service capabilities[54]. Investment and Financial Assets - The total amount of domestic insurance fund investment assets reached approximately RMB 37.698 billion as of June 30, 2024, with fixed income investments accounting for 75.4%[70]. - Total investment income for the first half of 2024 was RMB 620 million, down from RMB 723 million in the same period of 2023, representing a decrease of approximately 14.3%[72]. - The annualized total investment return rate decreased to 3.3% in the first half of 2024 from 4.0% in the same period of 2023[72]. - The company’s bond investments were approximately RMB 18.53 billion as of June 30, 2024, with 99.2% rated AA or above[91]. Customer Segments and Product Offerings - The strategic focus includes expanding into new customer segments in finance, retail, and manufacturing, enhancing business growth and operational efficiency[13]. - The total premium for the health ecosystem segment was RMB 4,538,314 thousand, a decrease of 9.6% from RMB 5,017,983 thousand in the previous year[21][24]. - The total premium for the automotive segment increased by 34.0% to RMB 1,101,927 thousand compared to RMB 822,491 thousand in the previous year[21][24]. - The company expanded its product matrix to include over 100 dedicated products for chronic diseases and 35 products specifically for women[26]. Operational Efficiency - The company maintained a solvency ratio of 224%, indicating strong capital adequacy[14]. - The self-operated channel generated total premiums of RMB 3.162 billion, accounting for 20.8% of total premiums, with renewal premium contribution reaching approximately 82.2%[45]. - The average number of policies per paying user in the self-operated channel reached 1.6, with a customer renewal rate improving by 3.2 percentage points to 90.5%[45]. - The online reporting ratio for health insurance reached 99%, with a claims submission completeness rate of 88% using smart camera materials[48]. Market Recognition and Growth - The company ranked 460th in the "2023 China Top 500" list, improving by 37 places due to technological advancements and strong business performance[13]. - ZA Bank reported net income of HKD 725.5 million, a year-on-year increase of 45.9%, while the net loss ratio narrowed by 71.7 percentage points to 42.9%[14]. - ZA Bank became the first digital bank in Hong Kong to receive the "Rising Star" award from Euromoney, recognizing its innovative financial solutions[65]. Challenges and Risks - The company faces foreign exchange risks due to operations in multiple currencies, including HKD, USD, JPY, SGD, and EUR[111]. - The company has no significant contingent liabilities as of June 30, 2024[112]. - The company has not been involved in any significant litigation or arbitration as of June 30, 2024[131]. Corporate Governance - The company has adopted a corporate governance code as a benchmark for its corporate governance practices, ensuring compliance with applicable rules throughout the reporting period[122]. - The audit and consumer rights protection committee has reviewed the group's interim report for the six months ending June 30, 2024, and discussed accounting policies and internal controls with senior management and external auditors[124]. - The company has established various committees, including the nomination and remuneration committee, strategic and investment decision committee, and risk management and related party transaction control committee[125].

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]