中国太保：资本回报稳中向好

Investment Rating - The report maintains a "Buy" rating for China Pacific Insurance (Group) Co Ltd (2601 HK/601601 CH) with target prices of HKD 25 (H-shares) and RMB 35 (A-shares) [6][5] Core Views - The life insurance business is expected to maintain resilient growth in 2024, with NBV (New Business Value) projected to grow 16.8% YoY in 1H24 on a comparable basis [1][5] - Property and casualty insurance is expected to show stable underwriting performance, with a projected COR (Combined Operating Ratio) of 98.1% in 1H24 [2][5] - Capital returns are expected to improve, with ROE (Return on Equity) forecasted at 12% in 2024, higher than the 2022-2023 levels of 10.8%-11.4% [3][5] Life Insurance Business - 1Q24 NBV grew 30.7% YoY on a reported basis, with comparable growth estimated at over 40% [1] - Full-year 2024 NBV growth is expected to remain resilient despite high base effects from 2023 [1] - NBV margin is expected to improve significantly in 1H24 due to the impact of lower pricing rates in 2023 [1] Property and Casualty Insurance - The auto insurance market remains stable, with leading companies showing steady underwriting performance [2] - Non-auto insurance premiums are expected to grow faster than auto insurance premiums, continuing the trend from 2023 (17.2% growth for non-auto vs 5.6% for auto) [2] - 1H24 property and casualty insurance premiums are projected to grow 7.7% YoY, slower than 1H23's 14.3% but higher than 2H23's 6.2% [2] Financial Projections - 2024 EPS is forecasted at RMB 3.25, representing 14.7% YoY growth [5][13] - 2024 ROE is expected to reach 12%, up from 11.4% in 2023 [3][13] - 2024 NBV growth is projected at 14.55%, following 19.09% growth in 2023 [13] Valuation - Current valuation stands at 0.48x (A-shares) and 0.30x (H-shares) 2024 PEV (Price to Embedded Value), considered attractive [3][5] - The target price is based on a combination of embedded value (RMB 42/HKD 29) and book value (RMB 28/HKD 20) methods [9] Market Performance - The stock has shown relative stability in 2Q24, with the insurance sector's profits likely to be supported by high-dividend stocks [5] - 1H24 EPS is expected to grow 13.5% YoY, with operating profit (OPAT) projected to increase 3.3% [5]