Core Viewpoint - UBS reports that China Pacific Insurance (02328) outperformed market expectations in the first half of the year, driven by a 45% year-on-year surge in underwriting profit and a 27% increase in total investment income [1] Group 1: Financial Performance - The net profit after tax (NPAT) forecast for China Pacific Insurance has been raised by UBS by 4% for 2025, reflecting better-than-expected combined cost ratios and improved market sentiment [1] - Total premium income is projected to grow by 4.5%, with motor insurance and non-motor insurance premiums expected to increase by 3.5% and 5.8% respectively [1] Group 2: Valuation and Target Price - UBS has raised the target price for China Pacific Insurance from HKD 18.7 to HKD 20.7, maintaining a "Buy" rating due to favorable macro conditions and policy tailwinds [1] - The estimated combined cost ratios for motor and non-motor insurance are targeted to be below 96% and approximately 99% respectively [1] Group 3: Investment Income Outlook - UBS anticipates a slowdown in growth momentum for investment income in the third quarter, aligning with industry trends due to high equity return benchmarks and rising interest rates potentially lowering bond fair values [1] - Despite the anticipated slowdown, UBS believes that China Pacific Insurance will face less profit pressure compared to peers due to its smaller fair value exposure to equities and lower investment leverage [1]

Core Viewpoint - UBS reports that China's property insurance performance in the first half of the year exceeded market expectations, driven by a 45% year-on-year surge in underwriting profit and a 27% year-on-year increase in total investment income [1] Summary by Relevant Categories Financial Performance - The net profit after tax (NPAT) growth is attributed to significant increases in underwriting profit and total investment income [1] - Underwriting profit increased by 45% year-on-year [1] - Total investment income grew by 27% year-on-year [1] Future Projections - UBS forecasts total premium growth of 4.5%, automotive insurance premium growth of 3.5%, and non-automotive insurance premium growth of 5.8% by 2025 [1] - The net asset value and NPAT forecasts have been raised by 4% and 6% respectively, reflecting better-than-expected combined cost ratios and improved market sentiment [1] Valuation Adjustments - UBS has adjusted the valuation multiples to reflect a more favorable macroeconomic environment and supportive policy conditions [1] - The target price has been raised from HKD 18.7 to HKD 20.7, maintaining a "Buy" rating [1]