HTSC·2025-08-21 03:24Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 28.00 [1][2][10] Core Insights - The company reported a significant increase in net profit for 1H25, reaching RMB 668 million, a remarkable growth of 1103.5% compared to the same period last year. The underwriting profit also saw a substantial rise of 123% to RMB 630 million [6][10] - The health ecosystem remains the primary source of profit, contributing nearly 60% of the underwriting profit in 1H25, with a premium income growth of 38.3% [7] - The company has improved its overall loss ratio (COR) to 95.6%, reflecting enhancements across major business lines [6][8] Financial Performance Summary - Gross Premium Income: Expected to grow from RMB 31,744 million in 2024 to RMB 39,497 million by 2027, with a CAGR of approximately 10.13% [5][22] - Net Profit: Forecasted to increase from RMB 603 million in 2024 to RMB 1,321 million in 2027, indicating a strong recovery trajectory [5][15] - Earnings Per Share (EPS): Projected to rise from RMB 0.41 in 2024 to RMB 0.90 in 2027 [5][15] Business Segment Performance - Health Ecosystem: Achieved a premium income of RMB 6.275 billion in 1H25, with a significant growth of 38.3%. The underwriting profit nearly doubled, growing by 94.5% [7] - Auto Ecosystem: Premium income increased by 34% to RMB 1.48 billion, with an improved COR of 91.2% [8] - Consumer Finance Ecosystem: Reported a 24% growth in premiums, with a COR of 94.0%, reflecting prudent operational strategies [8] Banking and Technology Performance - Banking: The bank turned profitable in 1H25, earning HKD 49 million, with customer deposits growing by 8.8% year-on-year [9] - Technology: The technology segment's losses narrowed significantly from RMB 165 million in 1H24 to RMB 56 million in 1H25, indicating improved operational efficiency [9] Valuation Adjustments - The EPS estimates for 2025, 2026, and 2027 have been raised to RMB 0.85, RMB 0.79, and RMB 0.90 respectively, reflecting positive adjustments based on improved business performance [10][14]