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中国保险行业:2025 年上半年业绩回暖,韧性增强-China Insurance Sector_ H125 results wrap_ gaining resilience
2025-09-07 16:19
Summary of the Conference Call on the China Insurance Sector Industry Overview - The conference call focused on the **China Insurance Sector**, specifically discussing the performance and outlook of various insurance companies in the first half of 2025 (H125) [2][3][4]. Key Financial Metrics - **Net Profit After Tax (NPAT)** growth was reported at **+5.3% YoY** in H125, driven by: - A **2% increase** in insurance service results - A **lower effective tax rate**, down **7.5 percentage points** to **9.6%** - A **6.6% decline** in net investment results [2]. - **Annualized net investment yield** decreased by **0.2 to 0.4 percentage points** to a range of **2.8% to 3.8%** due to a down-cycle in interest rates and an "asset famine" [2]. - The **total/comprehensive yield performance** varied due to differences in market timing, investment strategy, and accounting choices [2]. Asset Allocation Insights - **Bond allocation** remained stable at **60%** HoH. - Exposure to **stocks and equity funds** increased by **1.5 percentage points** HoH to **13%** (weighted average). - Exposure to **debt NSA** decreased by **1 percentage point** HoH to **6.5%** [2]. - Within stocks and equity funds, **FVOCI allocation** rose by **6.3 percentage points** HoH to **31%** (weighted average) [2]. New Business Value (VNB) and Margin Growth - **First-Year Premium (FYP)** increased by **8.7% YoY** in H125, primarily driven by bancassurance amid household deposit migration [3]. - **VNB margin** improved by **0.4 to 9 percentage points** YoY, reaching **15% to 31%** on a like-for-like basis, with Ping An showing the largest margin uplift [3]. - The transition towards **participating (PAR) policies** is aimed at mitigating interest rate risk, with Taiping leading in this transformation [3]. Company-Specific Performance - **PICC Life** outperformed peers with a **11% HoH growth** in CSM, supported by strong new business contributions [4]. - **NAV** growth was **+1% HoH** (weighted average), with PICC P&C showing a **7.9% increase** due to strong ROE and resilience against falling rates [4]. - **NCI** experienced the largest NAV decline, down **13% HoH**, attributed to a steeper fall in government bond yields compared to spot rates [4]. Dividend Insights - Interim **DPS** increased at a double-digit level for most insurers, except for Ping An, which saw a **2.2% increase** [4]. Stock Recommendations - **Ping An (H)** is favored for: - Strong visibility for group OPAT growth acceleration, estimated at **+14%** for H225E compared to **+3.7%** in H1. - A relatively high dividend yield of **5.1%** for 2025E with a clear dividend policy. - Underperformance in YTD at **+23%** compared to life peers' weighted average of **+57%** [5]. Risks and Valuation - Investment risks in the Chinese insurance industry include: - Volatile investment returns - Prolonged interest rate down-cycle - Worse-than-expected operating experience variance [23]. - The valuation method used for Ping An is **Sum of the Parts (SOTP)**, with downside risks including larger-than-expected impairments and an intensifying property crisis [23]. Conclusion - The China Insurance Sector shows resilience with positive NPAT growth and strategic shifts towards more stable insurance products. Companies like Ping An are positioned for growth, but risks remain due to market volatility and interest rate fluctuations.