Core Insights - Manulife Financial Corporation (MFC) reported third-quarter 2025 core earnings of 84 cents per share, exceeding the Zacks Consensus Estimate by 13.5% and reflecting a 15% year-over-year improvement [1][9]. Financial Performance - Core earnings reached $1.4 billion (C$2 billion), marking a 7.6% increase year over year, driven by strong growth in Global Wealth and Asset Management (WAM), Asia, and Canada, alongside a release in expected credit loss (ECL) provision [2][9]. - New business value (NBV) for the quarter was $657 million (C$906 million), up 6.3% year over year, attributed to higher sales volumes in Asia, Canada, and the U.S. division [3]. - Annualized premium equivalent (APE) sales increased by 8% year over year, supported by higher sales in Asia, Canada, and the U.S. division [3][9]. - Wealth and asset management assets under management and administration totaled $774 billion (C$1,066 billion), reflecting a 9.6% year-over-year increase [4]. Segment Performance - Global WAM's core earnings were $381 million (C$525 million), up 9% year over year, driven by higher net fee income and performance fees [6]. - The Asia division reported core earnings of $550 million, a 29% increase year over year, due to continued business growth and improved insurance experience [7]. - The Canada division's core earnings were $310 million (C$428 million), up 2.6% year over year, driven by higher investment spreads and business growth in group insurance [8]. - The U.S. division's core earnings decreased by 20% year over year to $241 million, primarily due to unfavorable life insurance claims experience [9]. Key Metrics - Core return on equity expanded by 150 basis points year over year to 18.1% [4][9]. - Adjusted book value per common share increased by 12% year over year to $38.22 [5].

Sunshine Insurance Group - H Conference Call Summary Company Overview - **Company**: Sunshine Insurance Group - **Period**: 1H25 - **Net Profit**: Rmb3.4B, exceeding JPMe estimate of Rmb3.0B - **New Business Value (NBV)**: Rmb4.0B, up 47% year-on-year (oya) on a like-for-like basis [1][3] Key Positives - **Contractual Service Margin (CSM)**: - CSM balance reached Rmb56B as of June 2025, growing at 10.3% half-on-half (H/H) [2] - Indicates high visibility of steady underwriting profit primarily from CSM release [2] - **Earnings Performance**: - P&C's 1H25 underwriting combined ratio improved by 0.3 percentage points oya to 98.8% [2] - Overall net profit of Rmb3.4B represents a 7.8% increase oya, beating estimates [2] - **Solvency Ratios**: - Core solvency ratios for Sunshine Group, Sunshine Life, and Sunshine P&C are 171% (+13%p H/H), 155% (+18%p H/H), and 177% (+12%p H/H) respectively, well above the minimum requirement of 50% [2] Key Negatives/Concerns - **New Life Sales Volume**: - New life sales volume was Rmb19B, down 3% oya, with agency channel sales down 11% and bancassurance channel sales down 5% [3] - Indicates low new business quality, raising concerns about sustainability of in-force book growth [3] - **Market Reaction**: - Despite strong earnings, a negative stock reaction is anticipated due to concerns over the quality of new life sales [5][7] Likely Changes to Consensus - 1H25 net profit accounts for 59% of FY25E consensus earnings, suggesting potential marginal upward revisions to full-year consensus [4] Investment Thesis - **Market Position**: Sunshine Insurance Group has a composite license but has seen sluggish market share gains over the past decade [10] - **Growth Outlook**: Attractive CSM growth outlook indicates steady insurance profit potential, but the company requires more time to scale up its business size [10] - **Risks**: - Higher earnings volatility risk due to equity market movements - Capital adequacy concerns amidst falling bond yields - Imbalanced distribution channels for risk diversification [10] Valuation - **Price Target**: HK$2.10, implying a 5x FY25E P/E at the consolidation level [11] - **Valuation Methodology**: - Life Operations valued at 4x FY25E P/E - Non-life Operations valued at 3x FY25E P/E - Other business assigned 0.3x P/BV [11] Risks to Rating and Price Target - Upside risks include: - Mitigation of earnings sensitivity against equity market movements - Faster-than-expected recovery in front-book growth and new life sales - More balanced earnings contribution from the non-life segment [12]