Investment Rating - The report maintains a "BUY" rating for PICC P&C, with a target price of HK$15.80, implying a 16.5% upside from the current price of HK$13.96 [1][3]. Core Insights - PICC P&C is expected to report a strong net profit surge of 80%-100% YoY for 1Q25, reaching RMB10.6 billion to RMB11.7 billion, which represents 33%-37% of last year's total net profit [1]. - The improvement in the combined ratio (CoR) is attributed to reduced catastrophic claims and optimized asset allocation, with an estimated CoR of less than 95% for 1Q25 [1][7]. - The company is adjusting its auto and non-auto CoR forecasts to 95.9% and 99.0% respectively for FY25E, reflecting stringent expense controls and an improved underwriting structure [1][8]. Financial Performance - For FY25E, net profit is projected at RMB36.05 billion, with an EPS of RMB1.62, and a dividend yield of 5.1% [2][19]. - The company's return on equity (ROE) is expected to be 13.4% for FY25E, with a combined ratio of 97.1% [19][8]. - The total investment assets are forecasted to grow by 12.6% YoY, reaching RMB676.51 billion in FY24 [9]. Investment Strategy - The insurer is expected to increase its equity allocation to high-yield stocks under FVOCI, building on a 40% growth in FY24 [1][7]. - The report anticipates that the insurer's investment income in 1Q25 will benefit from equity gains and a rebound in bond yields, with China's 10-year government bond yield rising by 14.4bps to 1.82% [7][1]. Share Performance - The stock has shown a 1-month performance of 4.5% and a 3-month performance of 15.3% [5]. - The market capitalization of PICC P&C is approximately HK$301.6 billion, with an average turnover of HK$514.7 million over the past three months [3].
中国财险：1Q25 CoR outperformed-20250415