Huachuang Securities·2024-08-29 11:10Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 7.3 CNY, compared to the current price of 5.75 CNY [2][8]. Core Views - The company achieved a significant growth in New Business Value (NBV), with a year-on-year increase of 115.6% to 6.96 billion CNY in the first half of 2024. The net profit also showed a strong growth of 14.1% year-on-year, reaching 22.69 billion CNY [2][8]. - The report highlights the company's leading position in the property insurance sector, with a market share of one-third, and emphasizes the continuous improvement in risk management driving underwriting profitability [2][8]. - The report anticipates that the company's life insurance new business will face reduced pressure in the second half of 2024, supported by a further decrease in the preset interest rate, which will enhance the new business value rate [2][8]. Summary by Sections Financial Performance - In H1 2024, the company reported insurance service revenue of 261.63 billion CNY, a year-on-year increase of 6.0%. The return on equity (ROE) was 9.0%, up by 0.7 percentage points [2][8]. - The property insurance segment generated 235.84 billion CNY in revenue, with a combined ratio (COR) of 96.8%, reflecting a slight increase due to natural disaster impacts [2][8]. - The life insurance segment's NBV grew by 91.0% to 3.94 billion CNY, driven by improvements in new business value rates [2][8]. Investment Strategy - The company has adjusted its investment strategy by reducing holdings in TPL funds and increasing investments in OCI stocks to stabilize financial statements. As of H1 2024, the total investment asset scale increased by 6.9% to 1,531.83 billion CNY [2][8]. - The net and total investment yield rates were 3.8% and 4.1%, respectively, both showing a decline compared to the previous year [2][8]. Future Outlook - The report projects an increase in earnings per share (EPS) for 2024-2026, with estimates of 0.71 CNY, 0.81 CNY, and 0.89 CNY respectively, reflecting an optimistic outlook for the company's performance [2][8]. - The company is expected to continue benefiting from the growing demand for healthcare and elderly care services, which will likely lead to strong performance in the health insurance sector [2][8].