Zhi Tong Cai Jing·2025-12-08 08:40Core Viewpoint - UBS reaffirms China Ping An (601318)(02318) as the top pick in the insurance sector, maintaining a "Buy" rating with a target price of HKD 70, citing attractive risk-return profile due to significant acceleration in operating profit growth in Q4 [1] Group 1: Company Performance - The group is expected to achieve relatively high dividend yields of 4.9% and 5.1% for 2025 and 2026 respectively, with a clear dividend policy [1] - The company may become a major beneficiary of the relaxation of solvency regulations [1] Group 2: Industry Trends - The domestic insurance sector has strengthened recently due to the National Financial Regulatory Administration's announcement on adjusting risk factors for insurance companies, which encourages long-term patient capital [1] - The recent rise in Chinese government bond yields and a steepening yield curve are favorable for insurance companies, particularly life insurers, as they lead to higher reinvestment yields and positively impact embedded value and solvency [1] Group 3: Market Outlook - Some insurance companies are expected to have met their annual targets, shifting focus to next year's sales performance [1] - Ongoing macroeconomic uncertainties and strong savings demand, along with some banks raising the minimum purchase threshold for three-year fixed deposits, are expected to significantly benefit insurance sales, especially through bancassurance channels [1]