Investment Rating - The report maintains a "Buy" rating for the company, China Pacific Insurance (2601 HK), with a target price of HKD 25.00, indicating a potential upside of 45.9% from the current price of HKD 17.14 [1][2]. Core Insights - The company's earnings performance is robust, with a year-on-year growth of 1.1% in net profit for Q1 2024, outperforming peers who generally saw declines. This stability is attributed to consistent investment returns, improved cost ratios in property and casualty insurance, and tax contributions [1]. - The new business value has shown a significant year-on-year increase of 30.7%, surpassing competitors such as China Life and Ping An. The new business value rate has improved by nearly 4 percentage points, primarily due to adjustments in interest rates, product structure optimization, and reduced commission rates in the bancassurance channel [1]. - The comprehensive cost ratio for property and casualty insurance has improved, with a service revenue growth of 5.9% year-on-year in Q1. The underwriting cost ratio stands at 98.0%, a decrease of 0.4 percentage points compared to the previous year, outperforming peers [1]. - Investment returns remain stable, with a net investment yield of 0.8% in Q1, unchanged year-on-year, while total investment returns decreased by 0.1 percentage points to 1.3%, still above industry averages [1]. Financial Overview - The company's total revenue for 2024 is projected to be RMB 342,398 million, reflecting a year-on-year growth of 5.7% [4]. - Net profit is expected to reach RMB 31,745 million in 2024, marking a 16.5% increase compared to 2023 [4]. - The company’s return on equity (ROE) is anticipated to remain around 12% [1]. - The price-to-book ratio is currently at 0.6, with a dividend yield exceeding 6%, indicating attractive valuation metrics [1]. Business Performance Metrics - The new business value is projected to grow by approximately 17% year-on-year in 2024, with a total new business value of RMB 12,890 million [5]. - The comprehensive cost ratio for property and casualty insurance is expected to stabilize around 97.6% in 2024 [5]. - The company’s total assets are forecasted to increase to RMB 2,551,717 million by the end of 2024, reflecting a growth rate of 8.8% [8].
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