Core Viewpoint - ZhongAn Online (06060) is currently trading at 1.1x 2025e P/B, with an outperform rating maintained due to better-than-expected trends in virtual banking profitability and underwriting improvements, leading to upward revisions in earnings forecasts for 2025/2026 by 12.3% and 13.1% to HKD 0.73 and HKD 0.83 respectively, and book value estimates by 16.5% and 16.3% to HKD 15.23 and HKD 16.06 respectively, resulting in a target price increase of 9.5% to HKD 23, implying a 1.4x 2025e P/B and a 22.5% potential upside [1] Group 1: Financial Performance - In 1H25, ZhongAn Online reported total premium income growth of 9% year-on-year, with a combined cost ratio (CoR) improvement of 2.3 percentage points to 95.6%, driven by better-than-expected performance in health and consumer finance underwriting; net profit attributable to shareholders surged by 1103.5% to RMB 668 million, exceeding expectations due to underwriting profitability and improved performance from ZhongAn Bank [2] - The underwriting performance showed significant improvement, with property and casualty insurance premiums increasing by 9% to RMB 16.66 billion, primarily driven by health (up 38%), automotive (up 34%), and a notable recovery in consumer finance (up 24%); CoR improved by 2.3 percentage points to 95.6%, with underwriting profit growing by 109% to RMB 656 million [3] Group 2: Business Segments - The technology business reported a revenue of RMB 496 million in 1H25, a year-on-year increase of 12.2%; the Hong Kong virtual bank, ZA Bank, saw net income growth of 82.1% to HKD 457 million, with a cost-to-income ratio improving by 52 percentage points to 67%, achieving profitability with a net profit of HKD 49 million; attention is drawn to the developments in stablecoin-related businesses in Hong Kong and their potential positive impact on ZhongAn Bank's future financial performance [4] - Investment performance remained stable, with net and total investment returns of 2.1% and 3.3% respectively in 1H25, alongside improvements in foreign exchange gains and financial expenses, contributing to a net profit increase of 1103.5% to RMB 668 million, surpassing expectations [5] Group 3: Future Opportunities - The company is optimistic about the long-term development opportunities in the health insurance sector, driven by product innovation and operational capabilities amid healthcare reforms; the company’s automotive insurance is also expected to achieve both profitability and scale growth, supported by regulatory controls on pricing competition and trends in new energy and internet-based insurance [6]

Core Viewpoint - ZhongAn Online (06060) is currently trading at 1.1x 2025e P/B, with the company maintaining an outperform rating due to better-than-expected trends in virtual banking profitability and underwriting improvements, leading to an upward revision of 2025/2026e EPS forecasts by +12.3%/+13.1% to HKD 0.73/0.83, and an increase in 2025/2026e BVPS by +16.5%/+16.3% to HKD 15.23/16.06, resulting in a target price increase of 9.5% to HKD 23, corresponding to 1.4x 2025e P/B and a potential upside of 22.5% [1] Group 1: Financial Performance - In 1H25, ZhongAn Online reported total premium income growth of +9% year-on-year, with a combined cost ratio (CoR) improvement of -2.3ppt to 95.6%, driven by better-than-expected performance in health and consumer finance underwriting; net profit attributable to shareholders surged +1103.5% to RMB 668 million, exceeding expectations due to underwriting profitability and improved performance from ZhongAn Bank [2] - The underwriting performance showed significant improvement, with 1H25 premium income from ZhongAn Property & Casualty Insurance increasing +9% to RMB 16.66 billion, primarily driven by health (+38%) and auto (+34%) ecosystems, alongside a notable recovery in consumer finance (+24%); CoR improved by 2.3ppt to 95.6%, with underwriting profit growing +109% to RMB 656 million [3] Group 2: Business Segments - The technology business reduced losses, and the virtual bank turned profitable, with total revenue from technology output in 1H25 reaching RMB 496 million, a year-on-year increase of +12.2%; ZA Bank's net income grew +82.1% year-on-year to HKD 457 million, with a cost-to-income ratio improving by 52ppt to 67%, achieving a net profit of HKD 49 million; the company is advised to monitor developments related to stablecoins in Hong Kong and their potential positive impact on ZhongAn Bank's future financial performance [4] - Investment performance remained stable, with net and total investment yields for domestic insurance at 2.1% and 3.3%, respectively; improvements in foreign exchange gains and financial expenses contributed to a net profit increase of +1103.5% to RMB 668 million in 1H25, surpassing expectations [5] Group 3: Future Opportunities - The company is optimistic about the long-term development opportunities in the health insurance sector, driven by product innovation and operational capabilities amid healthcare reform; the company expects its auto insurance segment to achieve both profitability and scale growth, supported by regulatory controls on auto insurance pricing and trends in new energy and internet auto insurance [6]

Core Viewpoint - 2024 is seen as a breakthrough year for Futu Holdings, with significant growth in revenue and net profit driven by global market recovery and strategic expansion in overseas markets [1][3]. Financial Performance - Futu Holdings reported a total revenue of HKD 135.9 billion (approximately USD 17.5 billion) for 2024, representing a year-on-year increase of 35.8% [3]. - The net profit for the year grew by 27% to HKD 54.3 billion (approximately USD 6.9 billion), with Non-GAAP net profit increasing by 26.2% [1][3]. - In Q4 2024, total revenue reached HKD 44.33 billion (approximately USD 5.71 billion), a remarkable year-on-year increase of 86.8% [3][4]. - Non-GAAP net profit for Q4 was HKD 19.52 billion (approximately USD 2.51 billion), showing a staggering growth of 105.4% year-on-year [3][4]. Business Segments - Trading commissions and fees were the main revenue drivers, with Q4 2024 income from this segment reaching HKD 20.57 billion (approximately USD 2.65 billion), a year-on-year surge of 127.6% [3][4]. - Interest income also contributed significantly, amounting to HKD 20.22 billion (approximately USD 2.6 billion) in Q4, reflecting a 51.8% increase [4]. - Other income, including wealth management and enterprise services, reached HKD 3.53 billion (approximately USD 454 million) in Q4, a year-on-year increase of 157% [4][5]. User Growth and Market Expansion - As of December 31, 2024, the number of asset-holding clients surged by 41% to 2.41 million, while total users grew by 16.2% to 25.1 million [7]. - Total client assets increased by 53.1% year-on-year to HKD 743.3 billion [7]. - The company has successfully penetrated seven major markets, including the U.S., Singapore, Australia, Japan, Canada, Malaysia, and Hong Kong, benefiting from favorable market conditions [3][7]. Strategic Initiatives - Futu is focusing on deep localization strategies in overseas markets, enhancing product offerings and customer experiences to attract local investors [8]. - The company is transitioning from a trading platform to a comprehensive financial services provider, with a notable shift in revenue structure [8][9]. - R&D expenses increased slightly by 3.7% to HKD 14.9 billion, primarily directed towards AI trading tools and virtual banking products [9]. Future Outlook - Analysts predict continued growth for Futu, with expectations of a compound annual growth rate of 21% in earnings per share from 2025 to 2027 [12]. - The company aims to enhance its wealth management asset ratio to 20% by leveraging AI tools and expanding its cryptocurrency offerings [9][12]. - The overall sentiment in the Hong Kong market and strong performance in the U.S. are expected to drive further increases in trading revenue [12].