CoR improved 1.4pct YoY to 94.8%, implying 2Q CoR at 95% as we estimate. Comprehensive loss/expense ratio was up 1.7pct/down 3.1pct YoY to 71.8%/ 23.0%. Auto/non-auto CoR was 94.2%/95.5%, down 2.2pct/0.1pct YoY, driven by effective expense controls partially offset by tick-up of claims. Auto: expense ratio dropped 4.1pct YoY to 21.1%, a record low, indicating the insurer's strong bargaining power in pricing and cost efficiency. Claims ratio edged up 1.9pct YoY to 73.1%. Non-auto: claims/expense ratio was up ...

Core Viewpoint - ZhongAn's share price experienced a significant surge of 55% in the week of May 26, driven by positive sentiment from the passage of the Stablecoins Bill in Hong Kong and the advancement of the GENIUS Act in the US Senate [1][2] Company Analysis - The valuation re-rating of ZhongAn is expected to gain traction in the market, supported by improvements in the insurance segment, with limited downside risk for the stock's valuation reverting to previous lows of 0.7x-0.8x FY25E P/B [2] - ZhongAn Online holds an 8.7% stake in RD Technologies, which is viewed as a potentially undervalued target [2][4] - The insurance segment is projected to see topline growth driven by robust health and auto premiums, with an improved combined ratio (CoR) supporting the margin profile [2][6] - The bank's target P/B multiple has been raised to 2.3x, reflecting its position as Hong Kong's first digital bank providing reserve banking services for stablecoin issuers and crypto trading services [2][5] Industry Outlook - The HK Stablecoin Ordinance is set to take effect this year, with the first batch of participants in the HKMA's stablecoin issuer sandbox expected to benefit from capital flow momentum in virtual assets [2][8] - ZA Bank, as a key player, is likely to benefit from the stablecoin boom, providing custody services for stablecoin issuers and potentially increasing net interest income through lower-cost savings deposits [3][5] - The insurance sector is anticipated to outperform, with total premiums growing by 12.7% YoY to RMB 10.9 billion in the first four months of FY25, and a full-year premium rise forecasted at 14.6% YoY [6][7]