PING AN OF CHINA(HK:02318) HTSC·2025-06-05 09:52Investment Rating - The investment rating for the company is "Buy" (maintained) with a target price of HKD 72.00 and RMB 73.00 [8]. Core Views - The company plans to issue HKD 11.765 billion in H-share convertible bonds, which reflects confidence in future growth and allows for lower-cost financing [4]. - The company's new business value (NBV) is expected to grow steadily, with a projected year-on-year increase of 27% for 2025, driven by strong performance in the bancassurance channel and resilient growth in the agent channel [2]. - The investment strategy focuses on high-dividend stocks, with significant investments in major banks to enhance cash returns in a low-interest-rate environment [3]. Summary by Sections Insurance Business - The bancassurance channel has seen a robust growth of 171% year-on-year in NBV for Q1 2025, aided by the removal of restrictions on bank partnerships [2]. - The agent channel also showed resilience, with a 12% year-on-year increase in NBV for Q1 2025, driven by improved value rates [2]. Investment Strategy - The company emphasizes the allocation of FVOCI stocks and has actively increased stakes in banks since December 2024 to boost dividend income [3]. - The current low bond yields have led to a potential slowdown in bond allocation, with the 30-year government bond yield at 1.89% compared to a new policy rate of 2.5% for traditional life insurance [3]. Financial Projections - The company maintains its earnings per share (EPS) forecasts at RMB 7.37, RMB 7.83, and RMB 8.31 for 2025, 2026, and 2027 respectively [5]. - The projected gross premium income for 2025 is RMB 584.644 billion, reflecting a 6.07% year-on-year growth [7]. - Total investment income is expected to reach RMB 209.034 billion in 2025, marking a 29.78% increase from the previous year [7].