Xin Lang Cai Jing·2025-12-16 14:04Overall Review - The insurance sector has experienced an overall increase, with A-shares and H-shares showing differentiated performance [1][7] - The fundamental performance indicates high value growth, with investment driving continued net profit growth [1][7] Financial Performance - For Q1-Q3 2025, the net profit growth year-on-year shows significant increases: China Life +60.5%, New China Life +58.9%, China Pacific Insurance +50.5%, PICC +28.9%, Taikang +19.3%, and Ping An +11.5% [2][9] - In Q3 2025 alone, the net profit growth year-on-year is led by China Life +91.5%, China Pacific Insurance +91.4%, and New China Life +88.2% [2][9] - The net asset changes from the beginning of the year show China Life +22.8%, PICC +16.9%, and China Pacific Insurance +12.3%, while Taikang saw a decline of -2.5% [2][9] Investment Logic - Insurance company profits are derived from underwriting profits and investment profits, with underwriting profits influenced by premium income and operational costs [3][10] - The investment profit is primarily affected by investment yield and liability cost rate, with the former being more variable due to market conditions [3][10] - The improvement in underwriting profits is driven by better product structures, channel efficiency, and cost control [3][10] Historical Stock Selection Logic - The stock selection logic for insurance companies has evolved through four phases over the past decade, with a focus on value growth from 2015-2019, short-term catalysts from 2020-2023, and a systemic revaluation of value in 2024 [5][13][14] - Since 2025, the systemic revaluation of value has continued, with H-shares of New China Life, PICC, and China Life leading the market [5][14] Future Outlook - The macroeconomic and capital market environment is expected to transition from a downward economic cycle with improving capital market conditions to a favorable economic cycle with a recovering capital market [6][15] - The focus will remain on net profit as a key indicator, with the importance of liability indicators represented by NBV expected to increase [6][15]