Zhi Tong Cai Jing·2026-01-20 01:58Core Viewpoint - Dongwu Securities maintains a "Buy" rating for China Taiping (00966), raising profit forecasts for 2025-2027 due to expected performance growth, with projected net profits of 270/200/222 billion HKD for those years, significantly up from previous estimates of 97/109/125 billion HKD [1] Group 1: Recent Events - On January 19, China Taiping announced an earnings forecast increase, expecting a year-on-year net profit growth of approximately 215%-225% for 2025, estimated at 266-274 billion HKD. The second half of 2025 is projected to yield a net profit of about 198-206 billion HKD, reflecting a year-on-year increase of 7.2-7.6 times. The first half of 2025 is expected to show a net profit of 67.6 billion HKD, up 12.2% year-on-year [1] Group 2: Performance Drivers - The significant increase in net profit is attributed to improved net investment performance compared to 2024 and a one-time impact from new corporate income tax policies introduced for the insurance industry. The Shanghai and Shenzhen 300 and All A indices are expected to rise by 17.7% and 27.7% respectively in 2025, outperforming 2024's growth of 14.7% and 10%. The insurance sector's allocation to public market equity investments has increased, benefiting from the stock market rise [2] - In December 2025, the tax authority issued a notice allowing insurance companies to account for the cumulative impact of retained earnings from the switch to new standards and annual tax differences starting in 2026, either in one lump sum or spread over five years. It is anticipated that China Taiping has adequately provisioned for deferred tax liabilities, leading to a one-time profit impact from the reversal of over-provisioned liabilities under the new tax standards [2]