Core Viewpoint - UBS reports that China Pacific Insurance (02328) outperformed market expectations in the first half of this year, driven by a 45% year-on-year surge in underwriting profit and a 27% increase in total investment income [1] Group 1: Financial Performance - The net profit after tax (NPAT) forecast for China Pacific Insurance for 2025 has been raised by 4%, reflecting better-than-expected combined cost ratios and improved market sentiment [1] - Total premium income, auto insurance, and non-auto insurance premium growth are projected at 4.5%, 3.5%, and 5.8% respectively for 2025 [1] Group 2: Valuation and Target Price - UBS has increased the target price for China Pacific Insurance from HKD 18.7 to HKD 20.7, maintaining a "Buy" rating due to favorable macro conditions and policy support [1] - The estimated combined cost ratios for auto and non-auto insurance are expected to be below 96% and approximately 99% respectively [1] Group 3: Investment Income Outlook - UBS anticipates a slowdown in growth momentum for investment income in the third quarter, aligning with industry trends due to high stock market return benchmarks and rising interest rates potentially lowering bond fair values [1] - Despite the anticipated slowdown, China Pacific Insurance is expected to face less profit pressure compared to peers due to its smaller fair value exposure to stocks and lower investment leverage [1]