CPIC(SH:601601) HTSC·2025-03-27 10:45Investment Rating - The report maintains a "Buy" rating for the company [6][5]. Core Insights - The company reported a strong growth in earnings per share (EPS) of RMB 4.67, a 65% year-on-year increase, slightly above the expected RMB 4.61, driven primarily by favorable investment returns [1]. - The total investment return rate for 2024 is 5.6%, up 3 percentage points year-on-year, contributing to significant net profit growth [1]. - The operating profit after tax (OPAT) for the life insurance segment increased by 6% year-on-year, indicating a faster growth rate compared to the first half of 2024 [4]. - The new business value (NBV) for life insurance saw a remarkable increase of 58% year-on-year, with expectations for continued growth [2][1]. Summary by Sections Life Insurance - The NBV for 2024 increased by 58% year-on-year, primarily due to a significant rise in NBV profit margins, despite a slight decline in new policies [2]. - The NBV profit margin is estimated to rise to 21.4% from 13% in 2023, driven by pricing rate adjustments and reduced channel sales expenses [2]. - The company has adjusted its investment return assumptions down to 4.0% from 4.5%, and the discount rate to 8.5% from 9.0%, which led to a 23% decrease in NBV [2]. Property Insurance - The combined operating ratio (COR) for property insurance increased by 0.9 percentage points to 98.6%, mainly due to higher claims from natural disasters [3]. - The claims ratio rose by 1.7 percentage points to 70.8%, partially offset by a decrease in expense ratio [3]. - Total premiums for property insurance grew by 6.8%, with a 3.7% increase in auto insurance and a 10.7% increase in non-auto insurance [3]. Profit Forecast and Valuation - The report has revised the EPS forecasts for 2025, 2026, and 2027 to RMB 4.74, RMB 4.79, and RMB 5.23 respectively, reflecting increases of 23% and 14% [5]. - The target price based on discounted cash flow (DCF) valuation is set at RMB 43 for A-shares and HKD 33 for H-shares, maintaining the "Buy" rating [5][6].