Investment Rating - The report maintains a "Recommended" investment rating for China Pacific Insurance (02328.HK) with a target price of HKD 17.8 [1][7]. Core Views - The company achieved a net profit of CNY 11.3 billion in Q1 2025, representing a year-on-year increase of 92.7%. Insurance service revenue rose by 6.1% to CNY 120.7 billion, while the combined cost ratio (COR) improved by 3.4 percentage points to 94.5%, significantly outperforming peers [1][7]. - The company is expected to benefit from a low base and contributions from fair value through profit or loss (FVTPL) equity assets, leading to an increase in investment returns. The annualized total investment return rate was 1.2%, up by 0.4 percentage points year-on-year, with total investment income growing by CNY 2.7 billion [1][7]. Financial Performance Summary - In Q1 2025, the company reported a 3.7% increase in original premium income to CNY 180.4 billion, with a COR of 94.5%, which is better than peers like China Taiping (97.4%) and Ping An (96.6%) [1][7]. - The underwriting profit surged by 183% to CNY 6.7 billion, with growth in auto insurance premiums by 3.5% and increases in accident and corporate property insurance, although agricultural and liability insurance saw declines [1][7]. - The report projects insurance service revenue for 2025 to be CNY 190.6 billion, with a year-on-year growth rate of 32.6% [3][8]. Earnings Forecast - The earnings per share (EPS) estimates for 2025-2027 have been revised upwards to CNY 1.69, CNY 1.86, and CNY 2.08 respectively, reflecting the company's strong performance and market position [1][7]. - The price-to-earnings (P/E) ratio is projected to decrease from 8.99 in 2024 to 6.24 by 2027, indicating potential value appreciation [3][8]. Market Position - The company has a total market capitalization of HKD 308.7 billion and a circulating market value of HKD 95.8 billion, with a debt-to-asset ratio of 65.8% [4][8]. - The stock price as of April 29, 2025, was HKD 13.88, with a 12-month high of HKD 15.2 and a low of HKD 8.70 [4][8]. Investment Strategy - The report suggests that the long-term growth in the property and casualty insurance sector will be driven by developments in new energy vehicle insurance and the optimization of cost structures through partnerships with automotive companies [1][7].
中国财险（02328）：业绩接近翻倍增长，COR显著领先同业