Xin Lang Cai Jing·2025-09-05 00:27Core Viewpoint - China Ping An's 2025 mid-year report shows mixed results with revenue and net profit declining, while operating profit and new business value in life insurance demonstrate growth, indicating resilience in core operations despite challenges in investment returns [1][2][3] Financial Performance - Revenue and net profit for the first half of 2025 reached CNY 500.1 billion and CNY 68 billion, reflecting year-on-year changes of +1.0% and -8.8% respectively [1] - Operating profit after tax (OPAT) increased by 3.7% to CNY 77.7 billion, while net assets rose by 1.7% to CNY 944 billion [1] - The non-annualized comprehensive investment return improved by 0.3 percentage points to 3.1% [1] Business Segment Analysis - Life insurance, property and casualty insurance, banking, asset management, and financial empowerment segments showed OPAT growth rates of 2.5%, 1.0%, -3.9%, 110%, and 179% respectively, with life insurance remaining the core business [2] - The improvement in property and casualty insurance profits was attributed to a 2.6 percentage point reduction in the combined ratio, primarily from enhancements in auto and guarantee insurance [2] - The asset management segment's net profit increased by CNY 1.43 billion, mainly due to a reduction in financial expenses [2] - The technology segment reported a net loss of CNY 2.6 billion, largely due to a one-time loss from the consolidation of Good Doctor [2] Life Insurance Insights - Life insurance's new business value (NBV) grew significantly, driven by a 149% increase in new policies through the bancassurance channel, achieving a high margin of 28.6% [2] - The number of agents and activity rates in the individual insurance channel continued to decline, with a 6 percentage point drop in activity rates to 49.9% [2] - The NBV's Contractual Service Margin (CSM) showed a 6.2% increase, with expectations for positive growth by year-end [2] Investment Performance - Investment returns for life insurance remained below the annualized 4% target, with property and casualty insurance net profit only increasing by 1% despite a 126% rise in underwriting profit due to a 30.2% drop in investment income [2] - Asset allocation shifted, with bond holdings in TPL accounts decreasing from 16.9% to 15.2%, while equity assets increased significantly [2] - The comprehensive investment return rose by 24.5%, with non-annualized returns improving to 3.1% [2] Profit Forecast - The company’s mid-year report aligns with expectations, particularly with the stabilization of life insurance CSM, suggesting potential for improved profitability [3] - Forecasted net profits for 2025-2027 are CNY 130.6 billion, CNY 148 billion, and CNY 173.2 billion, with respective growth rates of 3.2%, 13.3%, and 17.0% [3] - The estimated embedded value per share for 2025-2027 is projected at CNY 85.1, CNY 91.1, and CNY 97.8, with current price-to-embedded value ratios of 0.68, 0.63, and 0.59 [3]