PICC(SH:601319) Xin Lang Cai Jing·2025-03-28 10:35Core Viewpoint - The company reported a significant increase in 2024 earnings per share (EPS) to RMB0.95, a 90% year-on-year growth, primarily driven by strong investment performance, aligning with previous forecasts of 75%-95% growth [1] Group 1: Life Insurance Performance - The company's life insurance (including health insurance) new business value (NBV) increased by 127% year-on-year on a comparable basis, with agent and bancassurance channels growing by 86% and 223% respectively [2] - New single premium slightly declined by 1%, but NBV growth was driven by improved profit margins, with the NBV profit margin rising to 18% from 8% [2] - The company adjusted the long-term investment return rate to 4.0% and the discount rate to 8.5%, leading to an estimated 22% decrease in NBV due to assumption adjustments, but expects a 17% growth in NBV for 2025 [2] Group 2: Property Insurance Performance - The comprehensive cost ratio (COR) for property insurance increased by 1 percentage point to 98.8%, mainly due to natural disaster impacts [3] - The auto insurance segment maintained a stable underwriting performance with a COR of 96.8%, while the non-auto insurance COR rose by 2.8 percentage points to 101.9% due to increased loss ratios [3] - The company anticipates a return to normal disaster frequency in 2025, projecting a COR of approximately 98% for Chinese property insurance [3] Group 3: Investment Performance - Supported by strong investment performance, the company's return on equity (ROE) for 2024 is estimated at 16.5%, the highest in nearly a decade [4] - The total investment return rate improved significantly to 5.6% from 3.3% in 2023, resulting in over 100% year-on-year growth in investment income [4] - The company’s annual dividend per share (DPS) reached RMB0.18, up from RMB0.16 in 2023, with a dividend payout ratio of approximately 19% [4] Group 4: Earnings Forecast and Valuation - Based on favorable investment conditions, the company has raised its EPS forecasts for 2025, 2026, and 2027 to RMB0.93, RMB0.85, and RMB0.93 respectively, with adjustments of 21.3%, 1.5%, and -0% [5] - The target prices for A/H shares have been increased to RMB7.9 and HKD4.7, up from RMB7.2 and HKD4.4 [5]