Core Viewpoint - The long-established insurance company China Insurance is facing significant challenges, including internal operational issues and external pressures, leading to a decline in its core subsidiary, China Property Insurance, and overall financial performance [1][6]. Group 1: Company Performance - China Insurance's net profit in 2023 was nearly at a low of 0.93 billion, with a recovery to 5.12 billion in 2024, but this is still a significant drop from 10.15 billion in 2018 [6]. - China Property Insurance's net profit fluctuated significantly, with a total of 9.51 billion in 2024, but this was achieved while distributing 14.6 billion in dividends, indicating a concerning financial strategy [6][8]. - The company's core solvency adequacy ratio dropped to 137.37% by the end of 2024, a decrease of 18.75 percentage points from the previous year, highlighting capital pressure [7][10]. Group 2: Rating and Market Position - Fitch Ratings withdrew its "BBB+" rating for China Property Insurance, which had previously been downgraded from "A-" due to internal management issues and the deteriorating financial condition of its controlling shareholder, Oriental Asset Management [2][3]. - The market position of China Property Insurance is under threat, facing competition from peers like Sunshine Property Insurance, which has surpassed it in net profit multiple times since 2018 [7][10]. Group 3: Investment and Operational Challenges - China Property Insurance's investment income plummeted to 0.29 billion in 2024, a staggering decline of 96.92% from 9.43 billion in 2023, indicating missed investment opportunities [9]. - The company has a high exposure to risk assets, with 74% of its shareholder equity tied to these assets, and has faced issues with bad investments, particularly in real estate-related trust plans [10]. - The combined cost ratio for China Property Insurance has hovered around 99%, indicating operational inefficiencies and high claims costs [10]. Group 4: Regulatory and Governance Issues - China Property Insurance has faced over 100 regulatory fines in 2024, totaling more than 13 million, reflecting serious internal governance issues [11]. - Recent management changes have occurred in response to ongoing compliance failures, but the effectiveness of these changes remains to be seen [11]. Group 5: Life Insurance Sector Challenges - China Life Insurance has consistently reported losses since its inception, with a significant drop in insurance business revenue from 65 billion in 2022 to 52.51 billion in 2024 [12][13]. - The company relies heavily on bank insurance channels, which have seen a decline in contribution to total revenue, further weakening its competitive position [13].

Investment Rating - The report maintains an "Overweight" rating for the insurance industry, indicating a positive outlook for the sector in the next six months [1]. Core Insights - The insurance industry has shown a robust growth in New Business Value (NBV), with significant improvements in property insurance combined ratio (COR) [1]. - In Q1 2025, the net profit attributable to shareholders of listed insurance companies increased by 1.4% year-on-year, with notable variances among companies [5]. - The report highlights the impact of regulatory changes on the insurance market, particularly in the context of universal insurance products [5]. Summary by Sections Financial Performance - In Q1 2025, the net profit of major insurance companies showed varied results: China Life (+39.5%), China Ping An (-26.4%), China Pacific (-18.1%), and New China Life (+19.0%) [6]. - The total net assets of listed insurance companies remained stable compared to the beginning of the year, with China Life and Ping An showing steady growth, while China Pacific and New China Life experienced declines of -9.5% and -17.0% respectively [6]. Life Insurance - The NBV continued to grow rapidly, with New China Life and China Pacific reporting increases of +131% and +29% respectively, while China Life and Ping An saw declines of -4.5% and -19.5% [5]. - The proportion of participating insurance in new business for China Life reached 51.7%, indicating a successful transition in product offerings [5]. Property Insurance - The premium income for property insurance in Q1 2025 showed positive growth: China Life (+3.7%), Ping An (+7.7%), and China Pacific (+1.0%) [5]. - The combined ratio for property insurance improved due to a reduction in catastrophic claims and ongoing cost-cutting measures [5]. Investment Performance - Investment assets for listed insurance companies grew by 3.2% compared to the beginning of the year, with New China Life leading with a growth rate of 3.6% [5]. - The net investment yield for China Life decreased by 0.2 percentage points year-on-year, while Ping An and China Pacific remained stable [5]. Market Outlook - The report suggests that the insurance sector is currently undervalued, with low holdings in public funds, indicating potential for future growth [5]. - As of April 29, 2025, the insurance sector's valuation is at historical lows, with expected price-to-earnings ratios (P/EV) ranging from 0.49 to 0.79 [5].

Core Viewpoint - The company's value rate in life and health insurance business significantly improved in Q1, driving NBV growth of 34.9% year-on-year, with strong performance from bancassurance and community financial service channels [1][9] - The quality of the property insurance business improved significantly, with the combined cost ratio decreasing by 3.0 percentage points to 96.6%, leading to substantial growth in underwriting profit [1][5] - On the asset side, the company increased its allocation to high-dividend stocks, and the performance of OCI stocks in Q1 was impressive, contributing to an improvement in overall investment return rates year-on-year [1][6] Financial Performance - The company reported a 2.4% year-on-year increase in operating profit to 37.91 billion yuan in Q1, with life and health insurance business operating profit up 5.0% to 26.86 billion yuan [2][3] - The net profit attributable to shareholders decreased by 26.4% year-on-year to 27.02 billion yuan, primarily due to a fair value loss of 21.8 billion yuan in Q1, compared to a fair value gain of 34.49 billion yuan in the same period last year [3] Life and Health Insurance - The NBV for life and health insurance increased by 34.9% year-on-year to 12.89 billion yuan, driven by an improvement in the NBVM by 10.4 percentage points to 32.0% [3][4] - The first-year premium used to calculate NBV decreased by 19.5% year-on-year to 45.59 billion yuan [3] Multi-Channel Development - The company has effectively built a multi-channel professional sales capability, with significant results from various channels [4] - The agent channel saw a 14.0% year-on-year increase in per capita NBV, despite a high base from the previous year [4] - The bancassurance channel experienced a remarkable 170.8% year-on-year increase in NBV [4] Property Insurance - The underwriting profit for the property insurance business increased by 755.5% year-on-year to 2.76 billion yuan, driven by a 3.0 percentage point decrease in the combined cost ratio to 96.6% [5] - Insurance service revenue for the property insurance business increased by 0.7% year-on-year to 81.15 billion yuan, with original insurance premium income rising by 7.7% to 85.14 billion yuan [5] Asset Management - The overall investment return rate improved year-on-year, primarily driven by OCI stocks [6][7] - The company's investment portfolio reached over 5.92 trillion yuan, an increase of 3.3% from the beginning of the year [7] - The allocation to high-dividend stocks was increased, with the scale of other equity instruments growing rapidly [7] Other Business Segments - The banking business reported a 5.6% year-on-year decrease in net profit to 8.17 billion yuan, mainly due to a 13.1% decline in operating income [8] - The asset management business saw a 19.2% year-on-year increase in net profit to 1.09 billion yuan [8] - The financial empowerment business reported a net loss of 2.87 billion yuan, with a significant impact from one-time gains and losses related to the consolidation of Ping An Health [8] Investment Recommendation - The company is viewed positively for its long-term investment value, with a current valuation at a low level and sufficient margin of safety [9] - The estimated growth rates for NBV in 2025, 2026, and 2027 are projected at 23.0%, 14.1%, and 13.9%, respectively [9]

Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - Despite natural disasters in the first and third quarters affecting underwriting performance, these short-term factors do not impact the company's solid fundamentals and profitability. The long-term concentration in the industry is expected to continue rising due to enhanced market competition regulation, leading to improvements in both asset and liability sides and upward valuation potential [2][12]. - The company achieved a net profit of 42.87 billion yuan in 2024, representing a year-on-year increase of 88.2%. The comprehensive cost ratio for property insurance was 98.5%, up 0.9 percentage points year-on-year. The new business value for life insurance grew by 114.2% year-on-year, while health insurance new business value increased by 143.6% [6][12]. Summary by Sections Financial Performance - The company reported a total investment income of 82.16 billion yuan in 2024, an increase of 86.2% year-on-year, with a total investment return rate of 5.6%, up 2.3 percentage points year-on-year [12]. - The comprehensive cost ratio for auto insurance improved slightly to 96.8%, with original premium income of 297.39 billion yuan, a year-on-year growth of 4.1% [12]. - Non-auto insurance premium growth slowed, with agricultural insurance premiums declining by 5.7% year-on-year due to selection rhythm impacts, and the cost ratio for non-auto insurance rising to 97.3%, an increase of 3.3 percentage points year-on-year [12]. Business Segments - The life insurance segment saw a significant increase in new business value, with a year-on-year growth of 114.2%. The first-year premium income for life and health insurance grew by 1.6% and 50.2% respectively [12]. - Adjustments in economic assumptions for the value system did not hinder the high growth in new business value, with the new business value rate for life and health insurance increasing by 3.5 and 9.8 percentage points year-on-year respectively [12]. Market Outlook - The company is optimistic about the future potential for asset and liability improvements, with expectations of continued upward valuation space in the context of increasing market concentration and regulatory enhancements [2][12].

2025 年 3 月 29 日 公司研究 投资提振业绩，NBV 同比高增 ——中国人保（601319.SH）、中国人民保险集团（1339.HK）2024 年年报点评 A 股：买入（维持） 当前价：6.83 元人民币 分析师：王一峰 执业证书编号：S0930519050002 010-57378038 wangyf@ebscn.com 分析师：黄怡婷 执业证书编号：S0930524070003 010-57378023 huangyiting@ebscn.com | 市场数据（A 股） | | | --- | --- | | 总股本(亿股) | 442.24 | | 总市值(亿元)： | 3020.50 | | 一年最低/最高(元)： | 5.03/8.18 | | 近 3 月换手率： | 18.1% | | 收益表现 | | | | | --- | --- | --- | --- | | % | 1M | 3M | 1Y | | 相对 | -0.3 | -8.5 | 27.3 | | 绝对 | -1.4 | -10.2 | 38.5 | 资料来源：Wind 相关研报 H 股：买入（维持） 当前价：4.07 港 ...

Core Viewpoint - China Life Insurance reported a significant increase in net profit and maintained a strong dividend capacity, indicating robust financial health and growth potential in the insurance sector [1][4]. Financial Performance - The group’s net profit attributable to shareholders rose by 88.8% year-on-year to 42.2 billion RMB, aligning with expectations [1]. - The net assets attributable to shareholders increased by 11% to 268.9 billion RMB [1]. - The dividend per share grew by 14.7% year-on-year to 0.18 RMB, slightly below expectations [1][4]. Development Trends - The comprehensive cost ratio (CoR) increased due to significant disaster impacts, with a forecast for recovery in underwriting profitability by 2025 [2]. - In 2024, the property and casualty insurance premium income rose by 6.1% to 485.2 billion RMB, while the CoR increased by 1.0 percentage point to 98.8% [2]. - The net loss from major disasters exceeded the average of the past five years, impacting non-auto insurance profitability, although auto insurance CoR improved by 0.1 percentage point to 96.8% [2]. Life and Health Insurance Performance - Adjusted assumptions for life and health insurance still showed substantial growth, with life insurance contract service margin (CSM) increasing by 22% and health insurance CSM by 19% [3]. - The new business value (NBV) for life insurance, after assumption adjustments, remained 37% higher year-on-year at 5 billion RMB, while health insurance NBV was 131% higher at 6.5 billion RMB [3]. - The internal value of life and health insurance increased by 18% and 34% respectively from the beginning of the year [3]. Profitability Forecast and Valuation - The profitability forecast for 2025/2026 remains unchanged, with the company maintaining an outperform rating in the industry [5]. - The target price for the H-shares was raised by 27% to 6.2 HKD, reflecting a potential upside of 47.3% from the current price [5]. - The target price for the A-shares was increased by 10% to 7.6 RMB, indicating a 9% upside potential [5].

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 15.50 [8][9]. Core Views - The company's 2024 EPS is projected to be RMB 1.45, representing a 31% year-on-year increase, driven mainly by improved equity investments [1]. - The overall combined ratio (COR) for the company is expected to be 98.8%, reflecting a 1 percentage point increase year-on-year, primarily due to natural disaster impacts [1]. - The company is anticipated to maintain steady growth in its business, particularly in the auto insurance sector, which is expected to grow at a rate of 4.5% in 2024 [2]. Summary by Sections Auto Insurance Performance - The auto insurance COR for 2024 is projected at 96.8%, remaining stable compared to 96.9% in 2023. The loss ratio has increased by 2.2 percentage points to 72.6%, offset by a decrease in expense ratio [2]. - The auto insurance business revenue is expected to grow by 4.5% year-on-year, indicating a stable market outlook [2]. Non-Auto Insurance Performance - The non-auto insurance COR is estimated to rise by 2.8 percentage points to 101.9% in 2024, indicating underwriting losses. The loss ratio has increased by 2.7 percentage points, while the expense ratio remains stable [3]. - Revenue from property insurance is expected to grow by 4.7%, with a COR of 113.4%. Agricultural insurance revenue is projected to increase by 4.9%, with a COR of 99.7% [3]. Capital Returns - The return on equity (ROE) for the company is expected to rise by 2 percentage points to 13.1% in 2024, supported by favorable investment conditions. The total investment return rate is projected to increase to 5.5% [4]. - The company plans to distribute a dividend of RMB 0.54 per share for 2024, up from RMB 0.49 in 2023, with a payout ratio of 37% [4]. Earnings Forecast and Valuation - The EPS forecasts for 2025, 2026, and 2027 have been raised to RMB 1.62, RMB 1.69, and RMB 1.82 respectively, reflecting adjustments of 12.7% and 8.0% for the first two years [5]. - The target price based on DCF valuation has been increased to HKD 15.50 from HKD 13.60, maintaining the "Buy" rating [5].