Core Viewpoint - The report from Founder Securities maintains a strong buy rating for China Pacific Insurance (02328), highlighting steady premium growth, continuous improvement in the combined operating ratio (COR), effective risk management, and enhanced operational performance on the liability side, which collectively drive return on equity (ROE) and valuation improvements [1][2]. Group 1: Financial Performance - China Pacific Insurance is expected to achieve a net profit attributable to shareholders of 452 billion, 475 billion, and 498 billion yuan for the years 2025 to 2027, representing year-on-year growth of 40.6%, 5.0%, and 4.9% respectively [1]. - For the first three quarters of 2025, the company anticipates a net profit attributable to shareholders of 374.5 billion to 428 billion yuan, reflecting a year-on-year increase of 40% to 60% [3]. - The net profit for the third quarter of 2025 is projected to be between 130 billion and 183.5 billion yuan, with a year-on-year growth of 57.3% to 122.1% [3]. Group 2: Drivers of Profit Growth - The significant increase in net profit is attributed to two main factors: 1. A notable improvement in underwriting profit due to reduced disaster risk, the impact of unified pricing for auto insurance, and effective risk management, leading to a significant improvement in COR [4]. 2. An increase in investment income driven by a rising equity market, with the company's stock and fund investments accounting for 14.5% of total investment assets [4]. Group 3: Future Outlook - Premium growth is expected to rebound in the fourth quarter of 2025, despite a slowdown in the first eight months of the year due to high base effects from the previous year and pressures from the unified pricing of non-auto insurance [5]. - The trend of improving COR is likely to continue, supported by reduced disaster risks and the gradual improvement of expense ratios from unified pricing across various products [5].