Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - The market overestimates the credit risk of Zhonghua Property Insurance, and there is significant downward potential for the yield of its capital supplementary bonds, making them highly cost - effective. This is due to its strong shareholder background as a pure central - enterprise subsidiary, its leading market share with strong competitiveness, the turnaround in underwriting profitability, and the relatively low risk of interest rate spread loss for property insurance companies [2] Group 3: Summary by Directory 1. Controlling Shareholder with Strong Strength and Diverse Board for Stable Operation - **1.1 State - owned Holding Dominant, Controllable Related - Party Transaction Risks** - As of March 2025, Zhonghua United Property Insurance's registered capital was 1.464 billion yuan, with Zhonghua United Insurance Group holding 87.93%. The actual controller is Orient Asset. As of March 2025, all related - party transaction indicators met regulatory requirements [2][7] - **1.2 Stable and Experienced Management, Diverse Board for Stable Operation** - As of July 13, 2025, the company's board consisted of 9 directors. Since 2024, the chairman and general manager have remained unchanged. Board members' experiences cover multiple fields, which is conducive to the company's stable operation [12][14] 2. Underwriting End: Steady Development of Auto Insurance and Expansion of Agricultural Insurance Growth Pole - **2.1 Auto Insurance as the Main Product, Steady Increase in Agricultural Insurance Premium Income** - In 2024, the company's annual insurance business income was 6.8151 billion yuan, with a year - on - year growth of 4.39%. The top three products were auto insurance, agricultural insurance, and short - term personal insurance, with original premium incomes of 2.9323 billion yuan (43.05% of total premium income), 1.8081 billion yuan (26.54%), and 1.3315 billion yuan (19.55%) respectively. The proportion of non - auto insurance business income increased from 34.87% in 2021 to 37.41% in 2024 [16][17] - **2.2 Agent Channels as the Main Sales Channel, Declining Premium Contribution of Direct Sales and Broker Channels** - In 2024, the insurance agency, direct sales, and brokerage business revenues were 3.5112 billion yuan, 2.7147 billion yuan, and 0.5892 billion yuan respectively, accounting for 51.52%, 39.83%, and 8.64% of the total. The agency channel's income increased significantly, while the direct sales and brokerage channels' incomes decreased [22] 3. Investment End: Fixed - Income Investments as the Main Allocation, Decreasing Proportion of Equity Assets - From 2022 to 2024, the company's investment portfolio (cash and investment assets before impairment provisions) increased from 5.0543 billion yuan to 5.763 billion yuan, with a compound annual growth rate of 6.78%. In 2024, fixed - income investments accounted for 76.85%. The company optimized its investment structure in 2024, reducing the scale and proportion of equity assets [25][32] 4. Initial Signs of Underwriting Profit Recovery, Steady Progress in Capital and Liquidity Management - **4.1 Initial Success in Underwriting Profit Recovery, Pressured Investment Income** - From 2022 to 2024, the company's operating income increased from 5.5609 billion yuan to 6.3186 billion yuan, with a compound annual growth rate of 6.60%. In 2024, the net profit attributable to the parent company increased by 41.21% year - on - year to 0.95 billion yuan. The underwriting profit increased from - 0.214 billion yuan in 2023 to 0.452 billion yuan in 2024 [36][42] - **4.2 Capital Supplement Boosts Comprehensive Solvency, Robust Liquidity Risk Management** - In 2024, the company's core solvency ratio was 137.37%, and the comprehensive solvency ratio was 227.84%. At the end of the first quarter of 2025, the comprehensive solvency ratio was 236.88%, and the core solvency ratio was 145.67%. The company's liquidity risk was low, and its assets could meet cash - flow payment needs [49][56] 5. Facing Multiple Pressures and Challenges, Actively Adjusting Strategies for Stable Operation - **5.1 Frequent Penalties, Credit Insurance "Explosions", Rating Downgrades: Multiple Pressures on Zhonghua Property Insurance** - The company has been involved in events such as the credit guarantee insurance business of the P2P platform Houben Finance and the Luckin Coffee financial fraud case. It has also received many regulatory penalties in recent years. In 2024, Fitch downgraded the company's rating [60][61] - **5.2 Flexible Use of Reinsurance Strategies, Optimization of Cost Control** - In 2024, the company's reinsurance cession premium was 0.571 billion yuan, accounting for 8.38% of the total insurance business income. The company's comprehensive expense ratio decreased from 26.56% in 2022 to 23.04% in 2024, and the comprehensive cost ratio also decreased [63][70] 6. How to Evaluate the Investment Value of Zhonghua Property Insurance's Capital Bonds? - The company's existing capital tools amount to 8 billion yuan, all of which are paying interest normally, and there have been no historical default events. The spread of the company's long - remaining - term capital supplementary bonds is higher than the industry average, and there is significant downward potential for the yield, indicating high cost - effectiveness [73][75]