Core Viewpoint - China Pacific Insurance (601601.SH, 02601.HK) reported a 3.0% year-on-year increase in operating revenue to CNY 200.5 billion and an 11.0% rise in net profit to CNY 27.9 billion for the first half of the year, highlighting the company's focus on operational profit as a more stable indicator under new accounting standards [2] Financial Performance - The company achieved a net profit of CNY 27.9 billion, up 11.0% year-on-year [2] - Operating profit for the first half was CNY 19.9 billion, reflecting a 7.1% increase [2] - Dividend policy is now based on operating profit growth rather than net profit [2] New Business Value - New business value surged by 32.3% year-on-year, with a new business value rate of 15.0%, up 0.4 percentage points [2][3] - The bancassurance channel saw a significant growth of 82.6% in premium income, reaching CNY 41.7 billion [3] - The contribution of individual insurance and bancassurance channels to new business value was 60% and 37.8%, respectively [3] Investment Performance - Total investment yield was 2.3%, and comprehensive investment yield was 2.4%, both down by 0.4 and 0.6 percentage points year-on-year [3] - Net investment yield slightly decreased by 0.1 percentage points to 1.7% due to lower bond yields [4] - The company increased its equity asset allocation, with core equity (stocks and equity funds) rising to 11.8% of total assets [4] Dividend and Income - Dividend and stock income grew by 20.2% year-on-year, contributing 30% to net investment income of CNY 42.6 billion [4] - The company’s investment holdings are primarily concentrated in the financial, transportation, infrastructure, and energy sectors [4]

Core Viewpoint - The insurance sector in China is experiencing a decline in stock prices, with major companies like New China Life, China Pacific Insurance, and China Life seeing significant drops in their share prices. This is occurring alongside a discussion of China Ping An's financial performance, which shows a decline in net profit but an increase in operating profit, attributed to specific accounting treatments and market conditions [1][1][1]. Group 1: Company Performance - China Ping An reported a year-on-year decline in net profit for the first half of the year, while operating profit showed a year-on-year increase. The CFO attributed this to three main factors: one-time accounting treatments in the first quarter, the issuance of convertible bonds, and unrealized gains of 60 billion yuan from investments in listed companies not reflected in the profit statement [1][1][1]. - The stock prices of major insurance companies have seen significant declines, with New China Life down 5.29% to 46.54 HKD, China Pacific Insurance down 3.82% to 35.24 HKD, and China Life down 3.4% to 23.84 HKD [1][1][1]. Group 2: Market Conditions - The ten-year government bond yield has risen to around 1.78%, influenced by policies related to capacity reduction. This has contributed to high volatility in the insurance sector [1][1][1]. - According to a recent survey by the Insurance Asset Management Association, stocks are the preferred investment asset for insurance institutions in the second half of 2025, followed by bonds and securities investment funds. This indicates a cautious yet optimistic outlook for the insurance sector's investment value [1][1][1].

证券研究报告 中国平安 (2318 HK/601318 CH) 1H25：NBV 强劲增长，OPAT 提升 华泰研究 中报点评 2025 年 8 月 27 日│中国内地/中国香港 保险 平安公布 1H25 业绩：1H25 归母净利润 680.47 亿元，同比下降 8.8%。归 母营运利润（OPAT）可比口径同比增长 3.7%，核心利润保持稳定增长。 利润下降主要因为投资波动及平安好医生并表、可转债的转股权价值重估等 一次性因素。寿险新业务价值（NBV）可比口径同比增长 39.8%，主要由银 保渠道的高速增长驱动。财产险承保表现大幅改善，综合成本率（COR） 同比下降 2.6pcts 至 95.2%。DPS RMB 0.95，同比+2.2%，延续增长。考 虑到寿险 NBV 强劲增长、核心利润向好，维持"买入"。 寿险：NBV 增长强劲 1H25 寿险 NBV 同比增长 39.8%（可比口径，下同），增长强劲。银保渠 道仍然保持高增长，NBV 同比高增 168.6%。自去年银保渠道"一对三"限 制取消后，公司积极拓展银保业务，1H25 银保渠道 NBV 和新单保费都保 持快速增长。代理人渠道 NBV 仍保持增长（ ...

Core Insights - China Ping An reported a decline in net profit for the first half of the year, but operating profit showed a year-on-year increase, indicating underlying operational strength [1] Group 1: Financial Performance - The decline in net profit is attributed to three main factors: one-time accounting treatment in the first quarter, issuance of convertible bonds, and unrealized gains of 60 billion yuan from equity stakes in listed companies not reflected in the profit statement [1] - The company suggests that the market should focus more on operating profit as it better reflects the operational capabilities of the insurance industry [1]

Investment Rating - The investment rating for AIA Group Limited is "Buy" [1][7] Core Views - The report highlights a steady growth in operating profit, with a 6% year-on-year increase in after-tax operating profit to USD 3.609 billion in the first half of 2025, driven by a 9% increase in contract service margins [2][3] - The new business value increased by 14% year-on-year to USD 2.838 billion, with a notable performance in Hong Kong and Thailand [2][4] - The company returned USD 3.710 billion to shareholders through dividends and share buybacks, with an interim dividend increase of 10% to HKD 0.49 [2] Summary by Sections Operating Profit - The after-tax operating profit for the first half of 2025 was USD 3.609 billion, a 6% increase year-on-year, attributed to a 9% rise in contract service margins [2][3] - Basic after-tax operating profit per share rose by 12% to USD 0.34 [3] New Business Value - New business value increased by 14% year-on-year to USD 2.838 billion, with a new business value rate up by 3.4 percentage points to 57.7% [2][4] - Annualized new premiums grew by 8% to USD 4.942 billion, with regional performance varying across markets [4] Regional Performance - In Hong Kong, new business value rose by 24% to USD 1.063 billion, while Thailand saw a 35% increase to USD 0.522 billion [4] - The decline in new business value in mainland China was influenced by changes in economic assumptions, but adjusted growth was 10% [4] Distribution Channels - The agency channel contributed significantly, with new business value increasing by 17% to USD 2.220 billion, and a new business value rate up by 4.4 percentage points to 72.0% [5] - The partner distribution channel also saw growth, with new business value rising by 8% to USD 0.804 billion [5] Financial Forecasts - The report maintains previous profit forecasts, expecting insurance revenue of USD 20.841 billion, USD 22.436 billion, and USD 24.168 billion for 2025, 2026, and 2027 respectively [6] - Projected net profits for the same years are USD 7.112 billion, USD 7.701 billion, and USD 8.354 billion, with corresponding EPS of USD 0.50, USD 0.54, and USD 0.59 [6]

Investment Rating - The report maintains a "Buy" rating for AIA Group Limited (1299.HK) with a current price of HKD 73.45 [1] Core Insights - AIA Group achieved a post-tax operating profit of USD 3.61 billion in the first half of 2025, representing a year-on-year increase of 7% (fixed exchange rate) and 6.6% (actual exchange rate) [4][12] - The new business value reached USD 2.84 billion, up 14% (fixed exchange rate) and 15.6% (actual exchange rate) year-on-year, driven by increased sales and improved profitability of new business [5][12] - The embedded value stood at USD 70.85 billion, reflecting a 2.6% increase from the beginning of the year [4] Summary by Sections New Business Value - The new business value for the first half of 2025 was USD 2.84 billion, with quarterly growth rates of 12.8% and 18.9% for Q1 and Q2 respectively, primarily due to increased sales and enhanced profitability [5][6] - Annualized new premiums amounted to USD 4.94 billion, showing an 8.7% increase year-on-year [5] - The new business value margin recorded 57.7%, up 3.8 percentage points year-on-year, benefiting from product structure optimization and repricing in the Thailand and mainland China markets [5][6] Market Contributions - In mainland China, the new business value was USD 740 million, down 5% year-on-year, but showed a 10% increase when excluding economic assumption changes [6][11] - The Hong Kong market contributed significantly, with new business value increasing by 23.9% to USD 1.06 billion, maintaining its position as the largest contributor to the group's new business value [7][11] - The Southeast Asian market, particularly Thailand, saw a 45.4% increase in new business value to USD 520 million, aided by regulatory changes and strategic partnerships [8][11] Financial Performance - The net profit attributable to shareholders was USD 2.53 billion, down 23.5% year-on-year, mainly due to increased financial expenses related to insurance contracts [12] - The company returned USD 3.71 billion to shareholders through dividends and share buybacks, with an interim dividend of HKD 0.49 per share, up 10.1% year-on-year [12] - The report projects a downward revision of net profit forecasts for 2025-2027 to USD 7.0 billion, USD 7.6 billion, and USD 8.3 billion respectively [13]

Core Viewpoint - AIA Group's 1H25 performance aligns with expectations, showing robust growth in new business value (VONB) and operational profit, indicating strong operational efficiency and a solid outlook for future growth [1][4]. Group 1: VONB Performance - The company's VONB for 1H25 reached $2.84 billion, representing a year-over-year increase of 14% [1][2]. - VONB margin improved to 57.7%, up 3.4 percentage points year-over-year [1][2]. - VONB growth rates varied by region: Mainland China +10%, Hong Kong +24%, Thailand +35%, Singapore +16%, Malaysia -3%, and other regions +14% [2]. Group 2: Distribution Channels - The agent channel generated VONB of $2.22 billion, a 17% increase year-over-year, driven by improved product margins and agent quality [3]. - The partner distribution channel contributed VONB of $804 million, up 8% year-over-year, with a margin of 43.3% [3]. Group 3: Operational Profit and Free Surplus - The operational profit after tax (OPAT) for 1H25 was $3.61 billion, reflecting a 6% year-over-year increase [4]. - The company generated a free surplus of $2.43 billion, a 7% increase year-over-year, indicating strong capital generation capabilities [4]. Group 4: Investment Outlook - The company maintains a strong buy rating, with expectations for VONB growth rates of +15.2%, +9.2%, and +8.9% for 2025-2027 [5]. - The current stock price corresponds to projected PEV multiples of 1.32, 1.22, and 1.10 for 2025-2027 [5].