GF SECURITIES·2025-12-16 10:30Investment Rating - The report assigns a "Buy-A/Buy-H" rating to the company, with a current price of CNY 67.08 and HKD 65.25, and a reasonable value of CNY 85.17 and HKD 84.23 [4]. Core Insights - The company is positioned as a pioneer in the "transformational era" and a leader in "asset-liability linkage," with significant growth potential in the bancassurance channel, which is expected to drive value growth [8][10]. - The report highlights the company's strong performance in the bancassurance channel, with a new business value (NBV) compound annual growth rate (CAGR) of 31.6% from 2020 to 2024, significantly outpacing the overall market [21][22]. - The company's investment strategy focuses on high dividend yields and stable long-term returns, with a net investment return rate superior to its peers [8][10]. Summary by Sections Liability Side: "Pioneer of the Transformational Era" - The company has consistently led changes in the liability side of the insurance industry, achieving a new business premium CAGR of 7.5% from 2010 to 2024, outperforming peers [15]. - The bancassurance channel is expected to become a core growth driver, with significant room for expansion as the company currently holds the lowest market share among peers in this segment [21][22]. Asset Side: "Leader in Asset Management" - The company has strategically increased its bond allocation since 2018, ensuring a good match between assets and liabilities [8][10]. - The focus on high dividend strategies has resulted in a net investment return rate that is among the highest in the industry, with an average dividend return rate of 5.8% over the past three years [8][10]. Operational Quality: Real Estate Exposure and Sector Performance - The company's real estate exposure has been reduced to 3.3% of its insurance funds, with sufficient provisions for asset impairments [8][10]. - The profitability of both life and property insurance segments is on the rise, supported by improved performance in asset management and technology sectors [8][10]. Valuation: Dividend Yield and Market Position - The company offers a favorable dividend yield, with stable operational profit growth and high dividends, while its current valuation is lower than that of its peers [8][10]. - The report notes that public fund holdings in the company are significantly lower than the benchmark index, indicating potential for reallocation [8][10]. Earnings Forecast and Investment Recommendations - The report forecasts earnings per share (EPS) of CNY 8.91, CNY 9.85, and CNY 10.55 for 2025, 2026, and 2027 respectively, with a reasonable valuation based on the embedded value method [8][10].